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THE SITUATION ROOM

President Obama Holds Press Conference; Israel Strikes Hamas, Scandal Figure Under Scrutiny; Obama to Critics: "Go After Me"; Hamas Military Chief Killed in Gaza; Questions Surround North Korean Regime; Broadwell's Security Clearance Revoked; Tight Grip on Capitol Hill Power; Reaching Out to Romney?; Buffett Not Worried About Fiscal Cliff; Petraeus Scandal and Online Privacy

Aired November 14, 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:

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Senator McCain and Senator Graham and others want to go after somebody, they should go after me.

(END VIDEO CLIP)

BLITZER: A furious President Obama accuses Republican senators of trying to ruin the reputation of his United Nations ambassador, Susan Rice. Much more cautious comments from the president about the David Petraeus scandal and the FBI's investigation. We're covering all the angles of his first news conference since the election.

And Israel retaliates for rocket attacks with deadly strikes at extremist targets. Now Hamas is warning that the gates of hell have been opened.

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

Eight days after his reelection, President Obama faced reporters in the midst of an unfolding scandal and with a potential economic crisis holding over his head. But he only got riled up when he responded to Republican criticism of his United Nations ambassador, Susan Rice. More on that coming up. Stand by.

But, first, the president's careful responses about the investigation of this former CIA chief David Petraeus and on negotiations to avoid what's called the fiscal cliff.

Our chief White House correspondent, Jessica Yellin, was over at the president's news conference in the East Room of the White House.

Jessica, you had a chance to speak to the president and ask him about that looming fiscal cliff.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Wolf. That's right, I did. I asked the president why anyone should believe that he won't cave off of his position that he will not extend Bush tax cuts for the wealthiest since he did just that in 2010. He said that he made his case explicitly clear during the last election and that the majority of Americans agree with his position on this. Listen to what the president said.

(BEGIN VIDEO CLIP)

OBAMA: I think every voter out there understood that, that was an important debate, and the majority of voters agreed with me. Not -- by the way, more voters agreed with me on this issue than voted for me. So, we've got a clear majority of the American people who recognize, if we're going to be serious about deficit reduction, we've got to do it in a balanced way.

The only question now is are we going to hold the middle class hostage in order to go ahead and let that happen?

(END VIDEO CLIP)

YELLIN: Wolf, he is one of the few presidents to win reelection running on any sort of a tax increase.

One area where he seemed to offer specifics at one point, but then perhaps contradicted himself, was on the question of whether or not he believes loopholes are enough, just closing loopholes. At one point he suggested that simply closing loopholes for the very wealthiest does not do the budget math to help reduce the deficit.

And that would suggest that he thinks that you also have to increase the rates on the wealthiest Americans. At another point, he seemed to leave that an open question. So perhaps there is room for negotiation on that point when he meets with leaders this Friday, Wolf.

BLITZER: Yes. I think there will be a lot of negotiations going on. We also heard, Jessica, from the president about the Petraeus scandal, whether or not he believes he was informed appropriately. He wasn't even told until basically the whole thing was over with. Tell our viewers what he said.

YELLIN: Well, Wolf, he had words of praise for General Petraeus personally, for his long and accomplished career, and he wouldn't pass judgment on the general or on what he called his personal situation.

The president also avoided essentially answering questions about why he wasn't told sooner. He said that the FBI has a protocol and that protocol was followed. He wouldn't reveal whether he was shocked or disgusted or horrified to learn the news. He just didn't get emotional on the topic.

And he wouldn't go there when prodded. The bottom line on this is the president used every opportunity he could to say that there is an ongoing investigation and deferred this topic to the FBI and the Department of Defense's inspector generals. Those are the two areas, the DOJ and DOD, where the investigations are ongoing. Wolf, this is the first time the president has been asked about these issues. But as more details come out, I'm certain it won't be the last.

BLITZER: Certainly won't be the last. All right, Jessica, thanks very much. We have much more on this part of the story coming up, new information coming in on the entire Petraeus investigation.

But right now, let's go to the angry political fight that's unfolding between the president and Republican Senators John McCain and Lindsey Graham. It began to escalate earlier this morning when the senators vowed to stand in the way of the president if, if he goes ahead and nominates the United Nations ambassador Susan Rice to replace Hillary Clinton as secretary of state.

McCain and Graham are scathing in their criticism of Ambassador Rice's early remarks about the deadly attack on the U.S. diplomats in Benghazi, Libya.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This is about the role she played around four dead Americans when it seems to be that the story coming out of the administration, and she's the point person, is so disconnected to reality, I don't trust her. And the reason I don't trust her is because I think she knew better. And if she didn't know better, she shouldn't be the voice of America. Somebody has got to start paying a price around this place.

SEN. JOHN MCCAIN (R), ARIZONA: Let's see what happens here. But we will do whatever's necessary to block the nomination that's within our power as far as Susan Rice is concerned.

(END VIDEO CLIP)

BLITZER: All right. Listen to the president's very, very angry response to Senators McCain and Graham during that White House news conference.

(BEGIN VIDEO CLIP)

OBAMA: She made an appearance at the request of the White House in which she gave her best understanding of the intelligence that had been provided to her.

If Senator McCain and Senator Graham, and others want to go after somebody? They should go after me. And I'm happy to have that discussion with them. But for them to go after the U.N. ambassador who had nothing to do with Benghazi? And was simply making a presentation based on intelligence that she had received? And to besmirch her reputation is outrageous.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior congressional correspondent, Dana Bash. Dana, Senators McCain and Graham, they are now firing back at what we just heard the president say.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. In fact, Senator McCain did so on the Senate floor. He was going to the Senate floor already, Wolf, to formally introduce a resolution for a special or select committee for Congress to investigate all of the unanswered questions relating to the attack in Libya.

But he made a point while he was on the floor, again continuing in a very angry tone as we have seen from all of these men to respond to that comment from the president.

(BEGIN VIDEO CLIP)

MCCAIN: He said not to -- quote -- "pick" on his ambassador to the United States, to -- quote -- "pick on him."

That statement is really remarkable in that if the president thinks that we are picking on people, he really does not have any idea of how serious this issue is.

I'm a United States senator. The senator from New Hampshire is. We have our obligations, we have our duties representing the people that sent us here. And we're not picking on anybody. And I doubt if the families of these brave Americans who were murdered would believe that we are "picking on anyone" that when we are trying to find out the facts. The American people deserve to know the facts.

(END VIDEO CLIP)

BASH: Now, that was John McCain on the Senate floor maybe about an hour after the president spoke. But minutes after the president was done, Lindsey Graham, who the president was also talking about, released a statement quite unlike anything I have actually seen before, Wolf.

I will read you part of it. He said: "Mr. President, don't think for one minute I don't hold you ultimately responsible for Benghazi. I think you failed as commander in chief before, during and after the attack." He went onto say: "Given what I know now, I have no intention of promoting anyone who is up to their eyeballs in the Benghazi debacle."

There, of course, he's talking about the potential for the president to nominate the current ambassador to the U.N. Susan Rice to be secretary of state.

Look, I mean, there is no question there is deep-seated animosity between these two camps leading -- going back to 2008 when the president and John McCain were running against each other. But it's escalated to a whole new level now.

And, yes, it is true that John McCain and others are going after this saying that they want questions. But there's a lot of politics going on on both sides of this. BLITZER: If he decides to go ahead and nominate Susan Rice to be the next secretary of state, Dana, what are the chances that she will be confirmed by the United States Senate?

BASH: I think it's actually too early to answer that question, honestly. Clearly the Democrats do have a substantial majority, but not a 60-vote majority needed to break a filibuster.

They would need at least a handful of Republicans to vote with them to confirm Susan Rice if she is in fact nominated to be secretary of state. And given the way that this has become so politically polarized led by the president's former opponent, John McCain, it is too early to tell whether or not that would actually happen.

But Jessica mentioned this on the air before. You got to wonder whether or not even if the president wasn't planning on nominating Susan Rice before, whether he just wants to do it now to show he's not going to back down to these two Republican men, John McCain and Lindsey Graham.

BLITZER: Because if he doesn't nominate her, it will look to some at least like he has blinked.

BASH: Exactly.

BLITZER: Dana, thanks very much.

The president's news conference is certainly giving all of us a taste of his political strategy in the weeks and months ahead as he deals with all sorts of major challenges, including the Petraeus scandal.

Let's bring in our chief political analyst, Gloria Borger.

Gloria, the first question to the president in the news conference today on the Petraeus scandal, whether should have been told about it, wasn't told about it, listen to his carefully phrased answer.

(BEGIN VIDEO CLIP)

OBAMA: I have no evidence at this point from what I have seen that classified information was disclosed that in any way would have had a negative impact on our national security. The FBI has its own protocols in terms of how they proceed, and I'm going to let Director Mueller and others examine those protocols and make some statements to the public generally.

(END VIDEO CLIP)

BLITZER: Very cautious in his comments.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Very. Well, he had to be, Wolf.

Notice the caveats. This was a completely caveated statement. I have no evidence at this point, which means, of course, that there is an ongoing investigation that he wasn't about to comment on. But he also made a point that I think is very valid. A lot of people are talking about it. He said -- quote -- "One of the challenges here is we're not supposed to meddle in criminal investigations."

So he says there are protocols. If this is an ongoing criminal investigation, should it go up the chain of command to the president of the United States if it's not a matter of national security? Ironically, if it had been a clear-cut matter of national security, then it would have gone up the chain of command. So far we know that the director of national intelligence James Clapper was informed about it late in the game, I would have to say.

What we don't know, for example, is did the White House counsel know about this? Was the White House counsel already informed, but decided not to tell the president? We just don't know the answers to these questions. I assume they're going to come out when the FBI is questioned and the Justice Department is questioned by the Intelligence Committees.

BLITZER: I assume they will as well.

BORGER: Right.

BLITZER: In the meantime, the other big issue, the fiscal cliff, the president's got leverage now that he's been reelected by the Electoral College pretty decisively. How is going to play that?

BORGER: Well, he behaved and sounded like a man today who had a lot more leverage now than he did before the election. And obviously he got reelected.

Well, one thing he said that was interesting to me is he was kind of calling the Republican bluff here, Wolf. He said, OK, let's just all get together and do something that everybody agrees we should do, which is extend the tax cuts for the middle class.

As you recall, Republicans don't want to do that because then they lose their leverage when it comes to the tax cuts for the wealthy, what you do about those. And the president is sort of saying, OK, everybody wants those extended. You saw the results of the election, you read the exit polls, we need to do that first.

So he's kind of trying to put the Republicans in a spot, saying, OK, rational people, reasonable people, we all know we need to do that. And then, as a second part of the process, let's take a look at those larger issues. And he didn't draw a line in the sand, Wolf, about that top rate. He has said he wants to raise it to the rate of the Clinton years, 39.6 percent. But we didn't hear any number out of him today.

BLITZER: We saw a little different president of the United States today than we used to see.

BORGER: I do. I think we saw somebody who's clearly feeling like I have got the upper hand here. Take a listen to this.

(BEGIN VIDEO CLIP) OBAMA: I'm more than familiar with all the literature about presidential overreach in second terms. We are very cautious about that. On the other hand, I didn't get reelected just to bask in re- election. I got elected to do work on behalf of American families.

(END VIDEO CLIP)

BORGER: He's very clear, very confident. He's got enough work on his plate. He's got the fiscal cliff. He's got immigration reform, probably even tax reform. I think that's enough to get him started. What do you think?

BLITZER: Major national security issues as well.

(CROSSTALK)

BORGER: And those are the unexpected things that pop up in a second term. Right?

BLITZER: Right. He never has to worry about getting reelected, but he does have to worry about his legacy down the road.

BORGER: Absolutely.

BLITZER: Gloria, thank you.

There are more questions right now emerging about Jill Kelley, one of the key figures in the scandal involving General Petraeus and General John Allen.

We're taking a closer look into the Tampa socialite's claim she deserves diplomatic protection, a claim she made in this 911 call.

(BEGIN AUDIO CLIP)

JILL KELLEY, TAMPA SOCIALITE: I'm an honorary consul general, so I have inviolability, so they should not be able to cross my property.

(END AUDIO CLIP)

(COMMERCIAL BREAK)

BLITZER: So how could what happened to General David Petraeus affect you?

Jack Cafferty's following this part of the story in "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The -- Wolf, the Petraeus sex scandal raises serious questions about privacy that could affect every American who goes online. That would be all of us, I guess.

A lesson for everyone: what starts as a government search for crime on the web can turn into an invasion of the private lives of American citizens. And don't think it couldn't happen to you. In this case, what started out as an investigation into alleged harassing e-mails from one woman to another wound up exposing an extramarital affair and ultimately bringing down the director of the CIA.

One electronic privacy expert told "The New York Times" that cyber investigations can rapidly become open-ended because there is such a huge amount of information available, and it's so easy to search. Quote, "If the CIA director can get caught, it's pretty much open season on everyone else," unquote.

The ACLU questions what surveillance powers the FBI used to look into the private lives of Generals Petraeus and Allen. We still don't know, but it could include methods like subpoenas and search warrants.

Then there's this -- Google acknowledges it passed information to authorities in response to 93 percent of government requests in the second half of 2011. It's a tricky balance here. National security experts warn a major cyber attack could bring the country to its knees. But does that mean that Americans have to give up all rights to their privacy?

Some are especially concerned about the National Security Agency. That would be the same bunch of folks who conducted warrantless wiretapping on Americans after the 9/11 attacks. Remember the Patriot Act?

Here's the question: in light of the Petraeus scandal, is anything we do online really private?

Go to CNN.com/CaffertyFile, post a comment on my blog, or go to our post on THE SITUATION ROOM's Facebook page. Here's a hint -- no.

BLITZER: That's a pretty good hint, Jack. Thanks very much.

There's certainly very little that's private right now for the Tampa socialite Jill Kelley. She's a link between the David Petraeus scandal and the investigation scandal of General John Allen. Her background and connection to two of America's top generals is under enormous scrutiny right now.

CNN's Ed Lavandera is joining us from Tampa.

Ed, questions are emerging about Jill Kelley's finances, the charity she was running. You've been looking into this. You're investigating. What are you learning?

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, it's another confusing layer to this story when you're trying to paint the picture of just who Jill Kelley is and the circles the she (AUDIO GAP) at the finances swirling around here, here in recent years after her and her husband moved down here to the Tampa area. We've learned through court records that the home that she has in this upscale neighborhood of Tampa, on a Bayshore Boulevard overlooking the beautiful bay, has been in foreclosure since 2010, as well as another investment property in downtown Tampa that they've had foreclosure issues as well. And there's almost 10 lawsuits involving the Kelleys finances, including from credit card companies that say that they are owed more than $300,000 from the couple. What all of this may or may not have to do with the story surrounding the general's scandal is up in the air. But it's just another one of these confusing layers to this already very confusing story -- Wolf.

BLITZER: What about Jill Kelley's thinking that she was entitled to some sort of diplomatic protection?

LAVANDERA: Oh, yes. We got a hold of this 911 phone call that apparently she made after her name had started surfacing and reporters were going to her house looking for comment. She called a 911 operator. Listen to what she told them.

(BEGIN AUDIO CLIP)

KELLEY: I'm an honorary consul general, so I have inviolability, so they should not be able to cross my property. I don't know if you want to get diplomatic protection involved as well, but now, because it's against the law to cross my property, since this is now like, you know, it's inviolable.

DISPATCHER: All right. No problem. I'll let the officers know.

KELLEY: Thank you.

(END AUDIO CLIP)

LAVANDERA: And again, you know, another kind of bizarre twist. She had this honorary consular title that was given to her from the South Korean government. She's been very involved in charity work here in the Tampa area for many years and she moved down here. But, of course, any kind of official privilege like that would not have been anything that she would have qualified for according to various people we've spoken with today -- Wolf.

BLITZER: So much bizarre going on here.

We're going to have more later coming up on this including the fact that both General Petraeus and General Allen wrote separate letters to a judge urging that judge to allow Jill Kelley's twin sister to have custody of a son. How they got involved in a custody battle is way, way up in the air right now. Lots of questions on that front as well. We'll have much more on this story coming up.

But there's other major news we're following right now, serious news in the Middle East. Israel responding to rocket fire with air strikes, naval shelling killing a top extremist leader in Gaza. Why Hamas is now warning that the, quote, "gates of hell are now open."

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester's monitoring some of the top stories in THE SITUATION ROOM right now.

Lisa, the world's biggest automakers, two huge recalls. What's going on?

LISA SYLVESTER, CNN CORRESPONDENT: That's right, Wolf. Toyota is recalling more than 2.5 million Prius and Corolla problems for problems with the hybrid system and steering shafts. Last month, Toyota recalled nearly 7.5 million, the largest by automakers in years.

And G.M. is recalling more than 15,000 vehicles. In certain Buick and Chevy compacts, the driver side air bags might not deploy and some Cadillac sedans may have faulty head restraints.

And the man who accused Elmo puppeteer Kevin Clash of having a sexual relationship with him while he was under age is now taking it all back. The young man now in his 20s withdrew the charges just one day after making them. Clash took a leave of absence from "Sesame Street" in light of the allegations. "Sesame Street" has not indicated how soon the voice of the beloved red muppet may return to work.

And I know a lot of people were shocked by that, but it all turns out it wasn't true. He said it all along. "Sesame Street" stood by him. He did take a short leave of absence. So, a lot of people are waiting for Elmo to get back to work.

BLITZER: I hope he gets back soon.

SYLVESTER: Same here, Wolf.

BLITZER: Thank you.

Israel is hammering Gaza in response to rocket fire. Hamas extremists are warning of a new escalation.

And President Obama shows his temper in a growing feud with Republican Senators Lindsey Graham and John McCain. Much more on that coming up here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: With his U.N. ambassador under fire, President Obama drew a line in the sand today telling reporters that anyone who doesn't trust Susan Rice's handling of the Benghazi attack should go after him, not her.

Republican senators are doing just that. Here to talk about this dust up is the former U.N. Ambassador Bill Richardson. He served during the Clinton administration.

Governor, Ambassador, I don't know what to call you anymore. Thanks very much for coming in.

BILL RICHARDSON, FORMER U.S. AMBASSADOR TO U.N.: Nice to be with you, Wolf.

BLITZER: I'm going to play this little clip. This is Senator McCain, a man you know quite well, and the president arguing over Susan Rice.

(BEGIN VIDEO CLIP)

SENATOR JOHN MCCAIN (R), ARIZONA: We will do whatever's necessary to block the nomination that's within our power as far as Susan Rice is concern.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: If Senator McCain and Senator Graham and others want to go after somebody, they should go after me. And I'm happy to have that discussion with them.

But for them to go after the U.N. ambassador who had nothing to do with Benghazi and was simply making a presentation based on intelligence that she had received and to besmirch her reputation is outrageous.

(END VIDEO CLIP)

BLITZER: Pretty extraordinary you see a president get into a fight like this with Senators McCain and Lindsey Graham.

RICHARDSON: This is really unfortunate especially since it's only a few days after the election. We thought that bipartisanship was coming back especially in foreign policy. I know Susan Rice. I've known her a long time. She's honorable, experienced, dedicated. And I got those intelligence briefs in the morning whenever we were dealing with the crisis.

BLITZER: When you were U.N. ambassador?

RICHARDSON: When I was U.N. ambassador. You act and say what your intelligence briefing said at the time. But then those intelligence briefings change because there's an ongoing investigation of what happened in Benghazi.

BLITZER: She went on the five Sunday talk shows five days or so after the attack on the U.S. Consulate in Benghazi that killed the U.S. ambassador and three other Americans. And what she said was not accurate, but she insists she was just repeating what she had been briefed by the intelligence community.

RICHARDSON: That's the information she had. And I think just apart from that, Wolf, a president should have the right to nominate who he wants for secretary of state.

BLITZER: But the Senate has the right to confirm or reject, right?

RICHARDSON: I know. But the candidates if it's Senator Kerry, Susan Rice, Ambassador Rice, two excellent candidates, I mean, I don't think there's been a situation where a secretary of state candidate has ever been blocked. So this is unprecedented.

BLITZER: You think the president will go ahead and nominate her?

RICHARDSON: I don't know. I don't know. But I think things should cool down. I think it's important that Senator McCain is the key figure in foreign policy in the Senate. The president's commander in chief, I think they need to work at a little among themselves. BLITZER: They might need you to negotiate a deal or whatever. Let's move on. A very serious development today in Israel and Gaza, the Israelis go in with air strikes kill the Hamas military commander and others. It seems to be escalating big time. Some people are afraid of it all-out war. What's going on here?

RICHARDSON: Well, this is a very serious escalation. What is going on is my sense that Hamas is saying to the PLO, to the Palestinian people, we are the leaders. We are the ones with the rockets, with the arms.

We know the Palestinians are going to the U.N. to get statehood. We think that we give you a better deal. That's very dangerous. Secondly, it puts the whole Egyptian/Israeli peace deal very, very dicey. That really worries me and then lastly --

BLITZER: Because this new government.

RICHARDSON: This new government and the fact no one seems to be controlling Hamas. And then the whole Palestinian, the whole Sanai Peninsula, I think it's very dangerous.

BLITZER: Where does Iran fit into this?

RICHARDSON: Well, Iran's a big player. They control Hamas. They're right now agitating. They're agitating probably Egypt. They're agitating Hamas --

BLITZER: And Lebanon presumably?

RICHARDSON: Yes. Yes.

BLITZER: What concerns me as somebody who's covered this story for a long time, if tensions heat up with Hamas and Gaza, heat up with Hezbollah from Lebanon and Iran working on its nuclear program, look what's happening Israel's neighbor in the north, Syria, there's potential there are for huge explosion.

RICHARDSON: Yes. There's a powder keg potential. There's another reason why this administration has leverage, strength now that the president won should push once again for an Israeli/Palestinian agreement.

BLITZER: With the Palestinian authority.

RICHARDSON: With the PLO, two-state solution. Push that. Get the Israeli supportive, but right now I can understand what Israel's doing, defending itself.

BLITZER: Two years ago almost to the day you went to North Korea. I went with you, spent six days in Pyongyang. Since then there's a new leader, Kim Jong-un, the young man now the leader of North Korea. You studied this subject closely. I'm curious. Do you see significant changes yet positive changes, negative changes? What do you see in North Korea? RICHARDSON: I see positive changes. I think this young man is different than his father, his grandfather. He's reaching out to his people. It's still an oppressive regime. He's somebody that studied in Switzerland and Europe so maybe knows western ways.

He has a leadership style that seems to be more open, more positive. I've got a hunch that this guy we may want to do business with him. It may make sense to reach out. Now, in the past our hands have been shut down when we try to do that.

But I wouldn't dismiss this guy and I think it makes sense to try to revive the six-party talks. I think he might be open to a deal to get rid of his nuclear weapons. They desperately need food. Their people are enormously poor. They need technology. I'd give this guy a little opening.

BLITZER: All right, we'll see what happens. Ambassador, thanks very much for coming in.

RICHARDSON: Thank you.

BLITZER: Bill Richardson, the former governor of New Mexico.

I want to go right to our Pentagon correspondent Barbara Starr. She's getting new information on Paula Broadwell. What are you learning, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, some really stunning new information. CNN has learned from two U.S. officials that Paula Broadwell's security clearance has been suspended. She is a serving reservist, if you will, with the U.S. Army, a military intelligence analyst.

As such, she would at least have a secret level security clearance. We are now told that security clearance suspended pending the outcome of several investigations. We went to the Army to ask them for an official response. They will not say anything except the following.

And let me read it to you. Quote, "Appropriate actions with regard to this officer's clearance and access have been taken." The statement goes onto say "the Army has been cooperating with federal law enforcement authorities in this matter. And those actions are ongoing."

Wolf, you will recall a couple of days ago the FBI went to Broadwell's home. We all saw the video of FBI agents taking away boxes of material, computers. The discussion centering around what kind of classified information she might have had in her home.

When someone with a security clearance has classified information in their home, there are two critical questions afoot. Do they have reason to have it? Is it a need-to-know basis? Does it relate to their professional work with the military for that security clearance?

And are they appropriately protecting that information? They must have authority to take it out of a military base. They must have authority to have it in their home and they must protect it. We know that these are the key questions, the critical questions being asked. We also now know her security clearance has been suspended -- Wolf.

BLITZER: And that could just be the start if she did in fact violate these procedures to protect national security secrets, she could be in deep potential criminal trouble as well. We have much more on this part of the story coming up at the top of the hour.

Barbara Starr breaking that news for us here in THE SITUATION ROOM. We'll take a quick break, continue our analysis of what the president of the United States said today at that first news conference since his re-election.

(BEGIN VIDEO CLIP)

REPRESENTATIVE NANCY PELOSI (D), MINORITY LEADER: Next. Next. I guess -- you always ask that question except to Mitch McConnell.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session." Joining us the Democratic pollster for the Obama campaign, Cornell Belcher along with CNN contributor and Republican strategist, Ana Navarro.

Listen, I want to play a little clip. This is a reporter asking Nancy Pelosi a question. She made it clear today she wants to remain the Democratic leader in the House.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You, Mr. Hoyer, all over 70, is your decision to stay on prohibits younger leadership from moving forward?

PELOSI: So you're suggesting everybody at the moment step aside? You don't realize that's quite offensive I guess.

(END VIDEO CLIP)

BLITZER: Let me start with you, Cornell. Are you surprised that she decided she wants to stay on as the minority leader?

CORNELL BELCHER, DEMOCRATIC POLLSTER FOR OBAMA CAMPAIGNS: No. I'm not at all. She's been a fantastic leader. She was a fantastic speaker moving through historic things throughout the House without her strong leadership probably would not have gotten done.

The House Democrats picked up last check eight or nine seats, Wolf. And in the end tally we actually got more people voting for House Democrats than Republicans. And we probably could have taken back the House if the seats weren't so dog gone gerrymander.

So, no, I don't think it's a surprise she's staying in there. She's a strong leader. She should stay in there. I got to tell you. I think the question is a little offensive. Because frankly, a lot of old men are in power in this country all across this country and they don't seem to get asked these same sort of questions.

BLITZER: You know, a lot of Republicans, Ana, correct me if I'm wrong, probably happy she's going to be the Democratic leader because they see her as a useful target in trying to score points.

ANA NAVARRO, CNN POLITICAL CONTRIBUTOR: There are few more useful targets for fundraising appeals for Republicans than Nancy Pelosi. She's become a lightning rod to the Republican side. So she's very useful.

Look Wolf, I get where she's coming from. No woman, I don't care who she is, likes to be asked her age, and the older you get the less you like it. Keep in mind the guy who made this question is Luke Russert.

He's a young man, also on MSNBC, not exactly a conservative network. And I think it is a legitimate question because people who are young tend to look at congressional leadership and wonder who's representing me.

BLITZER: I know Luke. He's an excellent young reporter indeed. Knew his father, Tim Russert, very, very well, the late Tim Russert, a great journalist in his own right.

Let's move on and talk a little about Mitt Romney because I thought the president was pretty gracious today in saying really nice things about Mitt Romney. In fact, we got a little clip.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: My hope is before the end of the year though we have a chance to sit down and talk. There are certain aspects of Governor Romney's record and his ideas that I think could be very helpful.

And, well, to give you one example, I do think he did a terrific job running the Olympics. What I want to do is to get ideas from him and see if there's some ways we can potentially work together.

(END VIDEO CLIP)

BLITZER: Ana, I think they can work together. Not necessarily right away. But I could easily see a day when the president and Mitt Romney they get together on some major projects.

NAVARRO: Yes, Mitt Romney sitting somewhere right now wondering why didn't he say that two weeks ago, but look, I think it's a very gracious gesture.

It would be symbolic bipartisanship, but I'm not sure his priorities shouldn't be smoking the peace pipe with Lindsey Graham and John McCain who are in the Senate and can help with the legislative agenda.

I'm not sure what base Mitt Romney represents right now within the Republican Party, but it would be a wonderful gesture. And I think it's the right thing and the right tone for the president to set.

BLITZER: Cornell, why are you smiling?

BELCHER: Because I'm stunned. I don't know what base Mitt Romney represents in the Republican Party. He was your nominee. He was the guy at the top of your ticket. What base he represents.

Look, the president, he did the right thing by reaching out to Mitt Romney. And he did the right thing by the way he opened his press conference talking about a letter from a gentleman who didn't vote for him.

But he understands he's got to work for that gentleman who didn't vote for him just the way he worked for the people who in fact voted for him. It was a great noble gesture, but that's the sort of leadership we need to sort of move this country forward.

It can't just be about your base. It has to be about the people who also worked with this. You got to be able to reach across the aisle and work with those people. I think it was a fantastic gesture by the president.

BLITZER: All right, guys. We'll leave it on that note. Fantastic gesture, love to leave it on a note like that. Guys, thanks very much.

Warren Buffett has made billions and billions of dollars by being way ahead of the curve. So what does he think of a looming fiscal cliff? In an exclusive interview, he tells our Poppy Harlow how a crisis can be avoided standby.

(COMMERCIAL BREAK)

BLITZER: Now to a CNN exclusive. Warren Buffett has weathered plenty of economic storms over the last few years, but the fiscal cliff is a new one looming just weeks away.

CNN's Poppy Harlow spoke with the oracle of Omaha to see if he could shed any new light on what might happen. Poppy, what does Warren Buffett say about this potential financial economic crisis?

POPPY HARLOW, CNN CORRESPONDENT: Well, you know, Wolf, his position on it really actually surprised me. He's far less alarmist than most when it comes to the fiscal cliff.

You know, just before the election Warren Buffett said he thinks there's a fairly good chance that we could fall over that fiscal cliff.

And he -- now that we do have a new Congress and we know what the makeup of Congress is going to be, who the next president is going to be, I asked him does that change his assessment. Here's his take.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: I don't know whether we'll go over it. It really depends very much, you know, on the Republicans in Congress. It doesn't take the whole group in Congress to avoid that.

I mean, if 25 Republicans decide that they'll put country above party and sign up for something that makes sense, we don't need to go over the fiscal cliff.

HARLOW: That's interesting. You say it really depends on the Republicans in Congress. What about the president? He's taking a very hard line going into these negotiations starting on Friday asking off the bat for $1.6 trillion in tax increases. What is the likelihood of the United States falling into a recession if we go over the cliff?

BUFFETT: I don't think that's going to happen. I think that if we go past January 1st, I don't know whether it will be January 10th or February 1st, but we are not going to permanently cripple ourselves because 535 people can't get along.

HARLOW: Even if we go over for two months, does that dip this economy back into recession?

BUFFETT: I don't think so.

(END VIDEO CLIP)

HARLOW: Interesting take there, Wolf. He really told me he wants the president to take a very hard line going into these discussions, which will begin on Friday.

A few other bits of news for you, when it comes to taxes, taxing the rich, corporate taxes, he told me he believes that the wealthy in this country should pay significantly more taxes that 30 percent capital gains tax double where we are now wouldn't be too high, 50 percent plus personal income tax wouldn't be too high.

Also he made an endorsement already for the next president in 2016. It's a woman. He thinks it should be Hillary Clinton telling me he does not think there is any more qualified candidate out there, so already talking about 2016 -- Wolf.

BLITZER: Never too early as far as that is concerned. All right, thanks very much, Poppy, for that.

We all knew Paula Broadwell had extraordinary access to David Petraeus. But we're now learning more about how and why she was able to look at top secret documents. What's going on? We'll have more. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Jack's back with the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour, Wolf, in light of the Petraeus scandal, is anything we do online really private? Ed in California, "Nope. Since the inception of Homeland Security, we have no privacy. E-mails and all social media's recorded and scrutinized by Homeland Security. If you want privacy, talk in person, not electronically. These generals should have known better, especially Petraeus."

Pete in Georgia writes, "The internet is a wide open global cesspool with zero security or privacy. The average person can't control their urges or impulses to fully accept the fact that the internet is the largest spider web ever devised.

Em writes, "George Bush and Dick Cheney eliminated our rights to privacy and any need to warrants." Brad in Oregon, "The patriot's act was the camel's nose under the tent. See which party provided the most votes to pass it."

Val in North Carolina, "There is little privacy in general and almost none online, anyone who thinks what he or she posts online will remain private just doesn't see the world as it is."

And Martha writes this, "Probably not. But it looks like delving into someone else's e-mail can have unforeseen consequences. Basically a cat spat between two silly broads fighting over one guy that morphed into a scenario involving the FBI, CIA, the Justice Department and the administration. Monica Lewinsky, eat your heart out."

If you want to read more about this, go to the blog, cnn.com/caffertyfile or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Jack, thank you.