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Pres. Obama Holds Out Hope As Cuts Loom; Interview with Jay Carney; CNN Investigates High Costs of Health Care

Aired February 22, 2013 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: And you're in THE SITUATION ROOM, happening now, President Obama holding out hope for a deal to avert massive forced budget cuts one week from today. His Press Secretary Jay Carney joins me live this hour.

CNN investigates the high cost of health care and uncovered some extraordinary salaries for health care executives.

And off the battlefield and on to the big screen. How wounded U.S. veterans bring authenticity to the film, "Lincoln."

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.



BLITZER: The cuts are getting closer. The warnings are getting more dire. One week from today, yes, one week from today, $85 billion will be stripped from the government budget, unless the White House and Congress can strike a deal. There's little sign of progress, but President Obama says, and I'm quoting him now, "hope springs eternal."

Our national political correspondent, Jim Acosta, is at the White House. He's joining us with the latest on this developing story -- Jim.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, it doesn't feel very spring-like over here at the White House, but, I can tell you that it does seem like judging by the president's pattern this week that he wants to take his message on these forced budget cuts over the heads of Congress and directly to the American people consider what happened here with the White House earlier this afternoon.

He made the rare move of taking questions from the press inside the oval office as he was sitting down with the prime minister from Japan, and it was all about these automatic spending cuts that go into effect starting one week from today. He warned that the cuts will hurt middle class Americans, but as you said Wolf, he does remain optimistic that, somehow, those cuts might be averted. Here's what he had to say.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hope springs eternal. And I will just keep on making my case not only to Congress, but more importantly, to the American people. Take a smart approach to deficit reduction and do it in a way that doesn't endanger our economy and endanger jobs.


ACOSTA: Now, just to hammer that message home, the White House sent out its transportation secretary, Ray Lahood, to talk to reporters at the White House briefing. He talked about what he described as a calamity for air travelers if these cuts go through. He said that 47,000 FAA employees are facing furloughs.

That would result in big delays at some of the nation's busiest airports, because air traffic controlled towers would not have all of the staff that they would normally have and that many small airport air traffic control towers might be closed altogether. It's all part of the White House effort to ramp up the pressure on Congress as these cuts draw closer. Here's what the transportation secretary had to say.


RAY LAHOOD, TRANSPORTATION SECRETARY: Flights to major cities like New York, Chicago, San Francisco, and others could experience delays of up to 90 minutes during peak hours, because we have fewer controllers on staff. Delays in these major airports will ripple across the country.


ACOSTA: Now, earlier today, House speaker, John Boehner, sent out a tweet complaining that the president is spending more time trying to blame republicans that he is actually engaging in negotiations and I can tell you from talking to both the speaker's office and the office of Senate minority leader, Mitch McConnell, they have had no further conversations with the president since these conversations they had yesterday, Wolf.

BLITZER: And next week, I take it the president once again taking all of this on the road? What's going on?

ACOSTA: That's right. We saw him with first responders earlier this week. Next week, he's going down to the tidewater area of Virginia. He'll be in Newport News visiting a ship building business. Obviously, this is a business that will be affected by cuts over at the Pentagon.

And, the transportation secretary, the White House Press secretary, Jay Carney, making the point today that when you have these effects of these cuts happening across the country, they not only affect federal employees or federal programs, you have vendors all across the country that are affected. And so, that's what the president will be explaining on Tuesday when he goes down to the tidewater area to say that, hey, ship builders, they're not only affected. All of their vendors that go to the process of sending parts and supplies to that ship building business, they will be affected as well, Wolf.

BLITZER: All right. Jim, thanks very much. Jim Acosta over at the White House.

Let's dig a little bit deeper with our chief White House correspondent, Jessica Yellin. She's here along with our chief political analyst, Gloria Borger, and also joining us, our chief national correspondent, John King. He's in Cambridge, Massachusetts today. Let me start with you, John. What do you think, these spending cuts will go into effect or will there be a last-minute deal?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: If you talk to both sides right now, Wolf, it sure seems like they will go into effect. Now, remember, we've had many of these crises over the last couple of years, and when they have been settled, they've been settled it the last minute. So, silly of us to think a week out, they might be getting about this. If there is to be a deal, we'll be talking about it next Wednesday and next Thursday, but as of today, don't count on it.

BLITZER: And we heard, Jessica, that the president did make some phone calls yesterday to the House speaker, John Boehner, the Republican leader in the Senate, Mitch McConnell. Did anything, based on all the reporting you're doing from your sources, emerge -- are they going to get together? Are they going to sit down and work something out?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: As of yet, no. Right now, Democrats and Republicans are just too far apart, Wolf. The president has put out a plan. I have it right here in black and white. It has $900 billion in cuts. It includes $400 billion in cuts to Medicare and Medicaid. But, Republicans have already seen it and rejected it.

BLITZER: That was the 2011 plan. That's a 10-year plan.


BLITZER: Does he have a specific $85 billion plan for this year?

YELLIN: His point is this includes -- this is well over $85 billion in cuts because there's 900 in here and they can obviously get to 85 within that.

BLITZER: But is he willing to forego tax increases?

YELLIN: No. And that's exactly the problem, because he wants that tax increase as part of this deal, and Republicans say that's a non-starter. So, the problem is, there's no halfway point.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They're talking past each other.


BORGER: They're not talking to each other. They had these perfunctory phone call. Nothing with each other. Not (ph) they're talking. But nothing was solved. And I think the truth of the matter is, although, while they wouldn't admit it publicly, is that at this point, both of them, sides, would probably prefer a sequester to the alternative of what it would take to avoid a sequester.

They're not ready to sit down. The president believes he can make his point that the Republicans are still unwilling to close tax loopholes on the rich and the Republicans are saying, you know what, this president doesn't want to do the spending cuts. They're taking short-term political gain, they each believe. But in the long-term, I think, it's just going to hurt them all.

BLITZER: John, let me read to you from David Brooks, "The New York Time's" columnist an article he wrote today. Among other things, he said this. He said "sequestration may have seemed insane back then when it was initially conceived over at the White House, but politicians in both parties are secretly discovering that they love sequestration now."

So, I guess, the question is, how much hypocrisy is going on right now on both sides?

KING: There's a ton of hypocrisy going on on both sides, and it wasn't -- I wouldn't say it was insane at the time, but it was viewed as a (INAUDIBLE). It was viewed as a gimmick. It was a way to get through one of those past crises. And again, we seem to be doing this every three or six or nine months because these guys, both parties, including the president and the Republican House, can't do their most basic job, pass a budget.

So, they put that in place. And the president thought there's no way the Republicans will ever take all those defense cuts, so they'll come to a grand bargain with me. The Republicans are saying, having that on paper was the only way to ever get a law that says we have to have some cuts because they don't think the president is ever going to give them the cuts they want.

Now, the problem is, the Republicans want to do Medicare and Social Security. Anybody outside, including a lot of Democrats will tell you the only way to get the big math is to do Medicare and Social Security, but Medicare and Social Security are exempt from the sequester. So, we haven't moved the ball forward from a policy perspective at all.

But Wolf, both sides now call it hypocrisy, call it politics. Both sides anticipate this happening a week from now. But remember, there's a March 26th, another deadline that looms then. So, both parties also think privately if it happens, it will only happen for a week or two, then they'll have to do something.

BORGER: So, they're in a perfect world. Zero accountability, zero responsibility.

YELLIN: But the other argument is that this will happen for a few weeks. We'll all feel a little bit of pain. We'll all start feeling --


YELLIN: -- leadership by either side.

BORGER: Right.

YELLIN: But it's what's likely to happen.

BORGER: And that's the problem because nobody is willing to accept the leadership role here and if the economy tanks as a result, and I also agree that, at some point, they are going to come up with a deal, but if it --

YELLIN: Is it going to tank or will it suffer? Let's be honest. The economy is not necessarily going to tank. It will suffer.

BORGER: Well, suffer, tank, not good. Still not good.

YELLIN: Not good. We'll agree on that. And it will go on for the prediction is, as John said, the forcing event is not this next -- March 1st date. It's the March 27 date which is when the government right after that runs out of money and that's when the day after that, no government workers will be --

BLITZER: Usually, they pass a continuing resolution, and they keep the government going. A CR as it's called.

BORGER: Right.

YELLIN: But we probably have to get some sort of agreement on all of these things before then to kick the can at least down the road a little bit. That's the expectation both in the White House and on Capitol Hill. So, maybe a short-term deal will be worked out, but the problem is, a short-term deal is how we got to this problem, in the first place.

BORGER: So, you have a politics that's so dysfunctional that you have to depend on a disruption of government services in order to get people to actually do their jobs. It's ridiculous.

BLITZER: All right. John, before I let you go, walk us through. What's going to happen assuming that these forced spending cuts go into effect one week from today? What happens in the week or two or three that follows?

KING: Well, that is the big question, because Republicans believe the president's exaggerating. They believe the White House team is exaggerating. The president says he has no authority, you know, to sort of pick within the agencies to prioritize within the agencies, that these are across the board cuts, therefore, as you heard the transportation secretary saying, Jim Acosta said, you know, flights will be delayed.

There won't be enough air traffic controllers. They said it will take people away from the -- the Republicans are saying that's exaggerated. But of course, agencies can make at least some adjustments to provide vital services. We're about to find out a week from today or 10 days or 12 days or so from today once they kick in. Who's right? How severe is the pain? And that will affect the politics and the pressure to get back to the table and make a deal.

I just want to -- just one quick observation, Wolf. I'm up here part time at the Kennedy School this semester. You write (ph) a whole bunch of great young kids, Democrats, Republicans, independents who want to get into public service. They watch this play out and they say, why would I ever want to work in Washington?

BLITZER: Yes. I think we're discouraging a lot of good people from wanting to come to Washington. All right. John, thanks very much. Jessica, Gloria, guys --

YELLIN: We only cover one story in Washington, wolf, and this is it.

BORGER: Dysfunction?

YELLIN: Right.


BLITZER: All right. Coming up, the west wing take on the battle. The White House press secretary, Jay Carney, he's standing by live in the briefing room. We'll speak here in the SITUATION ROOM.

Also, residents of a Los Angeles hotel, they are horrified to learn of a corpse in their water tank. There's new information on what happened.


BLITZER: We're following a manhunt police described as tense and extremely focused. They're looking for a black Range Rover at the center of a deadly shooting and fire that rocked the Las Vegas strip. CNN's Miguel Marquez is working the story for us. He's joining us now with the very latest. What do you know, Miguel?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, we know that investigators are working very hard at the same time that we're learning who some of the victims were and certainly one of the biggest victims in all of this was the taxi driver whose car burst into flames. He's 62-year-old Michael Bolden. He Was In Vegas about a year from Detroit.

He's a father of one. He's also a grandfather. He moved there because he was taking care of his mother. This was his first call of the day, Wolf, and his brother says this is a guy who just had a heart of gold.


TEHRAN BOLDON, VICTIM'S BROTHER: My life mission would be to see them punished and brought to justice for the senseless thing that they did. They don't know who they touched.


MARQUEZ: Now, we also understand that the driver of the Maserati in the coroner's office in Las Vegas has now confirmed this is Kenneth Cherry (ph) from Oakland. He is an aspiring rapper who goes by the name of Kenny Clutch (ph). This is a guy who gotten this -- the passenger in the car was only lightly injured and police say they are able to talk to that person and stay in touch with him.

He is a father of two kids. As you know, this all began at the valet section of the Arya Hotel, then it spilled out into the street. He was and shot and killed, slammed into that taxi. His father says he and the family are devastated.


KENNETH CHERRY SR., SON KILLED: When I talk about my son, that was the sweetest young man I've ever met in his life. He got a little miscommunicated (ph), but he was just -- all kids do. But Kenny was a smart, lovable person, and he cared about other people.


MARQUEZ: One thing that is very interesting about this situation, Wolf, is that the Las Vegas police, we had expected, would release either pictures or video of the individuals who got into that black SUV, that Range Rover and of the Range Rover itself. That has not happened, which is somewhat surprising because Las Vegas, as you know, has so many cameras, so much security, so many valet individuals that would have seen what happened and have very good witnesses.

It is likely that they seem to be working a lot of different things at the same time. They're saying at the moment that they have lots of good leads. It's just a question of time before they're able to act on them -- Wolf.

BLITZER: But if they have pictures or, you know, picture of the suspects, why wouldn't they release that and maybe average folks out there could spot them and help police find these individuals?

MARQUEZ: It is not clear. They may know who they are and they may want to get their case completely buttoned down before they go after them or make arrests. They may know that they've left the states and may be looking for them and they don't want it out to the press because they don't want them to bolt.

It's not very clear at the moment, Wolf, but it does seem that they have a heck of a lot of information on these individuals.

BLITZER: All right. Miguel, stay in touch with us and update us when you get more. Thank you very much. The discovery of a corpse inside a hotel water tank has residents horrified, and investigators searching for answers. How did the young woman's body get there? CNN's Kyung Lah has the latest now on this gruesome mystery from Los Angeles. What are you hearing, Kyung?

KYUNG LAH, CNN CORRESPONDENT: Well, Wolf, I can tell you that the coroner is telling us that it may be some time before we know the exact cause of death. It's a little more complicated when it comes to the autopsy because of the amount of time that the body was in the water. Meanwhile, investigators still trying to piece together how she ended up in that tank.


LAH: Water from the tap, something the Cecil Hotel doesn't want you to see. Hotel resident, Alvin Taylor, helped us videotape it with a cell phone. Chlorine, what the city is using to flush the hotel's entire water system after the gruesome discovery of a woman's body inside one of the rooftop tanks that may have been there for as long as 2 1/2 weeks.

Four tanks connect to the hotel's drinking supply and during those weeks, hundreds of residents and hotel guests have been using it.

ALVIN TAYLOR, CECIL HOTEL RESIDENT: It really turns my stomach. A lot of people have left and went to another hotel. Just the thought of it for so long.

LAH: The woman inside the tank, 21-year-old Alisa Lamb (ph). The tourist from Vancouver, Canada arrived in Los Angeles on January 26th. Surveillance video shows her acting oddly inside the hotel elevator as if she's hiding from someone. But Katie Orphan says Lamb didn't seem odd at all when they met.

KATIE ORPHAN, THE LAST BOOKSTORE: She was very outgoing, very lively, very friendly.

LAH: Orphan is the manager of a bookstore around the corner from the hotel called "The Last Bookstore," one of the last places Lamb was seen by anyone as she bought records and presents for her parents and sister.

ORPHAN: Talking about, you know, what books she was getting and whether or not what she was getting would be too heavy for her to carry around as she traveled or take home with her.

LAH: That was January 31st. The young woman planned to see more of California, say police. Her parents flew down to Los Angeles to plead for the city to help find their daughter. Outside the family's restaurant near Vancouver, a memorial for a young life lost too soon in an unforgettable manner.

ORPHAN: It kind of feels like the beginning of a (ph) novel, like this is the beginning of a Raymond Chandler story and Phillip Marlow is going to figure out what happened, and unfortunately, this is real life.


LAH (on-camera): Now, the public health department here in Los Angeles did test the water. We did get those test results yesterday. The investigators saying that as unpleasant as it may be for those hundreds of hotel guests who may have drank the water recently, the water did not contain any unsafe bacteria -- Wolf.

BLITZER: At least that as -- I guess, good news to know. All right. Thanks very much, Kyung. We'll continue to monitor this story as well.

So, you know the names, Daniel Day-Lewis, Sally Fields, Steven Spielberg, but the people in "Lincoln" who may have the most interesting stories of all are the extras, and we're going to tell you why. That's coming up.


BLITZER: All right. This just coming into the SITUATION ROOM. Britain's bond rating has been downgraded. Moody's Investor Services just announced its taking it down a notch from the top rating of AAA to AA-1. Moody's says it made the move in part because of the UK's rising debt burden and tepid growth outlook over the next few years. Britain's bond rating downgraded by Moody's. More on that later significant story coming in.

We've also just learned the man dubbed the world's most wanted deadbeat dad has been caught. Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. What happened?

LISA SYLVESTER, CNN CORRESPONDENT: Yes. That man's name, Robert Sand (ph), and he owes $1.2 million in child support. He has three children from two marriages but has avoided making the payments since 1996. He was arrested at Los Angeles International Airport after being deported from the Philippines.

And much of Athens, Greece, is under water after the worst storm in 50 years. The torrential rains led to severe flash flooding, and there are reports that at least one woman has died, and thousands, you see there, they were stranded. The floods came in so fast that people had almost no time to react. A worker was apparently left dangling through the glass ceiling at the parliament building there.

And here in the United States, residents of 20 states are digging themselves out from a massive snowstorm. Some places saw snowfall records. Kansas City International, for example, they got nine inches in a single day, almost doubling the previous record. And check out this iReport from Wichita, Kansas, showing enormous chunks of snow falling from a building.

Wichita got 14 inches over two days, and it's all part of a huge system that will eventually cause snow from the Mexican border all the way to New England which is where it is headed now. All right. You may have heard of acid rain but what about fire rain? You got to check out this incredible video from NASA. It shows, right there, an eruption on the sun, which is pretty common. But this one is a little different because of something called Cornell rain. Take a look here. It is charged plasma making fiery loops.

It's also amazing how big this thing is and my favorite part of the story is if you take a look, you know that little dot right there on the screen in the upper right-hand corner, that is actually Earth. That gives you just a little bit of a perspective of how large that thing really is. We all would like (ph) to show it here --

BLITZER: It's pretty hot on the sun.


SYLVESTER: Just a bit. You think?


BLITZER: Sort of warm. Thank you.

Just ahead, a story that will likely change the way you view so- called nonprofit hospitals for the rest of your life. "Time" magazine and CNN, we have partnered up for a jaw-dropping report, part two of this report. You're going to have to see it to believe it.


BLITZER: What you're about to see may change how you view hospitals forever. A "TIME" magazine has a new report out called "Bitter Pill: Why Medical Bills are Killing Us." The journalist Steven Brill spent months investigating why your medical bills are so high. What he found is jaw-dropping.

CNN has partnered with our corporate sibling, "TIME" magazine on this. Here's part two. Drew Griffin of CNN's Special Investigations Unit reports.


DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): Pat palmer has built a business around helping patients fight hospital bills. She says in no other business are all the cost of doing business. Itemized and billed separately.

You don't have a separate electricity bill added on to your grocery bill or a refrigeration bill charged separately when you buy ice cream. She argues if hotels ran their business like hospitals, you'd be charged for lying down on the bed.

PAT PALMER, MEDICAL BILLING ADVOCATE: Absolutely. If we went to a hotel and they charged us for sheets and towels, there would be a raucous made over those kinds of charges. And major issues but yet we're letting the medical industry do this on a daily basis. GRIFFIN: Palmer says she's found hospitals billing for everything from tissues to little white cups that hold aspirins. Everything has a charge. The bill sometimes hundreds of pages long have hidden codes or names.

Steven Brill writing a special report for "TIME" magazine says he makes just one conclusions. Hospitals want to prevent patients from knowing what they are paying for, all in an attempt to charge as much as they can get away with.

STEVEN BRILL, TIME CONTRIBUTOR: I defy you to take any hospital bill anywhere around the country and everybody watching this program knows this, and try to read that bill and try to understand what it says and what the prices actually are, let alone what the prices are based on. I mean, it's the opposite of transparency.

GRIFFIN: But not everyone, of course, is feeling that pinch. In the world of nonprofit hospitals, some people are making a small fortune. Public records show CEOs of top billing hospitals across the U.S. can garner salaries, deferred compensation and other revenues that rival CEOs of major for profit businesses.

Just take a look at this list put together by a "Health Care Business Journals Review of 2010 and 2011 Tax Filings" which showed CEOs of top grossing nonprofit hospitals making multimillion dollar figures.

Watch as the numbers get bigger. The top salary paid in 2010? Dean Harrison, chief administrator of the prestigious Northwestern Memorial Hospital in Chicago. His salary and one-time bonus earned him a whopping $9.7 million.

When we asked about these high salaries and high hospital bills, the American Hospital Association sent us to Taylor, Michigan, and to Malcolm Henoch, chief medical officer for Oakwood Healthcare System. But even he didn't want to talk about hospital executive salaries.

He was willing, though, to discuss hospital billing. Here the hospital says it tries to work with patients to understand their bills.

DR. MALCOLM HENOCH, OAKWOOD HEALTHCARE SYSTEM: The information we provide is not perfect. It doesn't disclose everything and it's not for everyone -- always easily understandable but it's a start. And I think this notion of transparency in health care is important.

GRIFFIN: Henoch admits billing at hospitals can be confusing but he defends the process by noting the cost of, say, a simple blood draw as lots of costs that patients don't see.

HENOCH: The cost of that is not just the cost of that vial but a cost of a technician who processes that sample. A cost -- a fraction of the cost of that individual who's drawn that blood from you, a fraction of the cost of that equipment that analyzes that blood sample. A fraction of the cost of that electronic laboratory information system that we need to collect and store and disseminate that information to the physician, to the nurse, perhaps to a number of physicians not even practicing at the hospital.

GRIFFIN: Which is why some people may be billed up to $200 just for a warm blanket. It is, in fact, all up for negotiation. If you are insured, your insurance company does the negotiating. If you're on Medicare, the government negotiates. If you are paying out of pocket, then the hospitals paying those million-dollar salaries determine just how much you will pay.

Your wealth or your health?

Drew Griffin, CNN, Atlanta.


BLITZER: "TIME" magazine reports Americans will spend $2.8 trillion on healthcare this year. Per person, that's 27 percent more than other developed nations spend on healthcare and as Drew's report pointed out, hospitals are getting a lot, a lot of that money.

President Obama making some dire warnings about the forced budget cuts to take effect a week from today. If it's such a bad idea, why did the president propose that idea to begin with? I'll ask that and more to the White House Press Secretary Jay Carney. He's standing by live.


BLITZER: All right. So one week from today, the Roman Catholic Church will be without a Pope. Pope Benedict XVI is resigning as of next Thursday. And until cardinals elect a successor his controversial right-hand man will be running things over at the Vatican.

CNN's Brian Todd is here in THE SITUATION ROOM with more.

So what happens in the interim. He resigns before a new Pope is elected?

BRIAN TODD, CNN CORRESPONDENT: That's right. And it can be complicated, Wolf. And a lot of intrigue. You know, the game of who's in charge and who's next is in full swing. The Vatican is being typically opaque right now but we do know of some key players to watch in the days ahead.


TODD (voice-over): It's palace intrigue in overdrive with Benedict XVI leaving the papacy on February 28th, who will wheel power at the Vatican until a new Pope is elected?

There is a position called the Camerlengo, a right-hand man to the Pope, an administrator who deals with finances, managerial tasks.

In the 2009 movie, "Angels and Demons," the Camerlengo was portrayed as an evil master power broker.

EWAN MCGREGOR, ACTOR, "ANGELS AND DEMONS": Open the doors and tell the world the truth.

TODD: In real life, the title of Camerlengo was held by Cardinal Tarcisio Bertone. He also holds the powerful position of secretary of state who in the Vatican is like a prime minister. But experts say don't get the idea that Bertone is the stuff of movie legend.

(On camera): Despite the job title and responsibility, he's not the best organizer?

MICHAEL SEAN WINTERS, NATIONAL CATHOLIC REPORTER: No. I mean, the joke in Rome was that he couldn't organize a one-man band. The number one criticism of Benedict's papacy has been the trains of not running on time and this was his job to make the trains run on time. the secretary of state.

TODD (voice-over): Michael Sean Winters, correspondent for the "National Catholic Reporter" newspaper, says Tarcisio Bertone was damaged in the so-called Vati-leaks scandal when the Pope's butler leaked documents exposing mismanagement and corruption. Despite his current status, exerts say Bertone has virtually no shot at becoming Pope. Analysts say he's also a bitter rival of Cardinal Angelo Sodano who heads the College of Cardinals which elects the new Pope.

(On camera): Are we looking at a power struggle in the interim between those two?

PROF. CHESTER GILLIS, GEORGETOWN UNIVERSITY: No. Because -- I don't think so. Because the interim is too short in this case. I mean, the interim will be a very short period. You don't have to have a funeral. You don't have to have the mourning period that we have normally. So they can go right into the general congregation and then the conclave very shortly after the Pope resigns.

TODD (voice-over): Another part of the palace intrigue, why would the Pope resign now just as Easter season begins? The most important part of the year for the Pope.

The Vatican has been keeping secrets, announcing Benedict had surgery to implant a pacemaker but they insist he's not sick.

GILLIS: The common phrase is the Pope is well until he's dead.


TODD: Is Benedict being pushed out? The experts we spoke to don't think so. Michael Sean Winters says all of Benedict's advisers lose their power as soon as he walks out the door so they likely wouldn't have moved against him -- Wolf.

BLITZER: Does the Pope, once he gives up being the Pope, does he go back to being Joseph Ratzinger? Does he have a new name? What's going on?

TODD: That's been a question bandied about all over the place since he announced his resignation. Analysts really don't know. You know we haven't had this problem for hundreds of years. They say that he could get a title like Bishop Emeritus of Rome, something like that. But they also say he is very likely to keep in extremely low profile after he steps down.

The churches cannot be seen as having two Popes rivaling at each other for power. It's already bizarre enough as it is.

BLITZER: Yes. All right, Brian, thanks very much. Brian Todd, reporting.

Coming up, the West Wing take on the battle. The White House Press Secretary Jay Carney, he'll join me live in THE SITUATION ROOM.


BLITZER: So we're only one week away from an $85 billion forced budget cut, part of a deal that was struck back in 2011 to raise the nation's debt limit. Everyone assumed at the time that the White House and Congress would eventually reach a new deal to avert these forced cuts which are across the board and rather ugly. But now with only seven days left, there's lots of finger-pointing going on but apparently no progress in resolving this crisis.

Let's talk about it with the White House Press Secretary Jay Carney. He's joining us right now.

Jay, thanks very much for coming in.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Glad to be here, Wolf. Thanks for having me.

BLITZER: Let's -- let me read to you a little bit from David Brooks' column in the "New York Times" today. He begins with these words. "On July 26, 2011, Jack Lew, then the White House Budget director, went to Harry Reid's office for budget strategy a session. According to Bob Woodward's book, 'The Price of Politics,' Lew told the Senate majority leader that they had come up with a trigger idea to force a budget deal. 'What's the idea,' Reid asked? 'Sequestration,' Lew responded. Reid folded himself over with his head between his knees as if he were going to throw up."

You -- I'm sure you read that column by David Brooks. Here's the question. If this is such a horrible idea, sequestration or these forced budget cuts, why did the White House come up with this idea to begin with?

CARNEY: Well, as you remember, Wolf, in the summer of 2011, we were facing a situation where the nation was about to default for the first time in its history because Republicans were refusing to agree to a balanced approach to a deficit reduction.

Both sides in these negotiations were looking for a way to craft a deal that would avoid default and a trigger mechanism to force further deficit reduction. Sequestration, which is a word that understandably most Americans have never heard before, was simply a way of crafting policy that was so onerous that would cause cuts that nobody liked, Republicans or Democrats, and that because of that they would compel -- the prospect of sequestration would compel Congress to compromise, come together on further deficit reduction in a balanced way.

You know, I understand that people like to point out that the idea was first floated by the White House but let's get real about what happened. On the day that Congress passed the sequester, John Boehner, speaker of the House, told CBS News that he got, quote, "98 percent" of what he wanted and that he was very pleased or pretty pleased.

One hundred and seventy-one Republicans voted for it in the House. Overwhelming number of Republicans. Far more than Democrats and every Republican leader voted for it. But here's the deal. It doesn't matter that Republicans and Democrats voted for it because the whole point was it wasn't supposed to come to pass and right now the president has been putting forward and Democrats have been putting forward ways to avert the sequester so that it doesn't take place.

BLITZER: All right. Here's the question --

CARNEY: -- so that jobs aren't lost but Republicans are saying, absolutely not. We're done talking about balance. We're done talking about revenues. We'd rather see those jobs lost and sequester take effect than asked corporations that get tax breaks and small businesses don't get or wealthy individuals that get --

BLITZER: All right. Let me just ask --

CARNEY: -- special tax breaks. That they get to keep them.


CARNEY: And rather than ask them to give them up.

BLITZER: So no one really thought that these forced cuts would go into effect. But they are about to go into effect a week from today. So here's the question, with hindsight, was it a blunder, was it a mistake to even raise this idea, what's called sequestration?

CARNEY: Wolf, you're missing -- you're missing the point. Everybody was looking for a way out of this and there was -- there are different ways to do it. Sequester was the way they did it. Senator -- Republican Senators Graham and Rudman crafted a sequester in the 1980s as part of a tax reform deal, you know, working with President Reagan -- you know, a reform bill working with President Reagan.

The point is, it wasn't supposed to become policy. What we have now is a situation where the president has put forward proposals to reduce our deficit by $4 trillion in total over 10 years. That's the goal that bipartisan commissions, economists have all said is necessary to reach fiscal stability and reduce the share of -- you know, reduce out debt as a share of GDP and our deficit as a share of GDP.

That's the goal that John Boehner and the president sought when they worked on the grand bargain in the summer of 2011 and when they worked on a fiscal deal late last year. So the president has put forward this proposal.

A poll yesterday showed that 76 percent of the American people support his approach, his balanced approach. Only 19 percent support the Republican position that this has to be done with spending cuts alone.

BLITZER: All right. So we've got to --

CARNEY: You know, so something has got to give.


BLITZER: We got -- something has got to give.

CARNEY: And the president has been willing to compromise.

BLITZER: Within the next week, there's got to be a deal. I know the president called the House Speaker John Boehner yesterday, Mitch McConnell, the Republican leader. Did anything positive emerge from those conversations?

CARNEY: Well, we're not reading out the contents of the conversations. What is clear is that -- and you know we made this clear publicly so -- you know, I think I can say this quite obviously that the president's position is that he supports efforts in the Senate and the House to buy down the sequester, to delay it, to make sure it doesn't happen in a balanced way, a mixture of spending cuts and revenues.

He has also left on the table the offer that John Boehner walked away from late last year which includes additional revenues through tax reform, but also tough spending cuts and entitlement reforms, and here's the thing that perplexing to us, Wolf. You remember last year during these negotiations in December, the speaker of the House said he could come up with $800 billion to $1 trillion in revenue through tax reform, closing loopholes and eliminating or capping deductions for wealthy individuals and corporations that have these special tax breaks.

He said he could do that then, but he won't do it now. And it makes no sense. Instead, rather than do that, end the, you know, tax break for corporate jet owners, he'd rather see up to 750,000 people lose their jobs.

BLITZER: Do we expect --

CARNEY: And the economy take the hit that sequester would give it.

BLITZER: Do you expect the president to invite Republican leadership over to the White House in the coming days to see if there's an opportunity for some sort of last-minute compromise?

CARNEY: Well, I can tell you, as you know, that they spoke yesterday, leaders with the president, I'm sure the president will continue to engage with Congress appropriately, and we are working obviously with Congress on this issue. But there's a fundamental problem here. Republicans have been very public that their position is they will not compromise, that they're done talking about balance in our approach to deficit reduction.

The problem with that is is the American people disagree overwhelmingly, so set aside that, you know, they don't agree with the president, they're at odds with this position with 76 percent of the American people.

BLITZER: Well --

CARNEY: And that includes a majority of self-identified Republicans.

BLITZER: Well, I just want to say --


BLITZER: Just want to be precise on this, Jay. The -- you know, as part of the deal to avert the fiscal cliff in December, you did raise taxes on the wealthiest Americans. The Republicans are saying for now, they are not going to talk about taxes. You want to talk about the comprehensive tax reform, couple that with comprehensive entitlement reform, lower rates, eliminate some loopholes, eliminate some deductions, you can get some sort of big picture deal. You clearly don't have time for that right now over the next week.

CARNEY: Well, right, which is why -- which is why the president says we should buy down the sequester just like Republicans and Democrats did in the fiscal cliff deal for two months. The reason why the deadline is March 1st is that it was postponed from January 1st by a bipartisan deal that included revenues and spending cuts, so small -- you know, a small package to buy it down.

BLITZER: Are the Republicans open to another two-month delay?

CARNEY: They have said they will not -- they will not go along with a postponement of the sequester if it includes balance which is a preposterous position because it's a position that not only does the president hold, and the Democrats and the Congress hold, but the American people insist is what they want.

So, you know, we're just -- the president has been entirely reasonable here that the sequester will have negative impacts on our economy. Outside economists say as much as more than 0.5 percent will be taken away from our GDP in 2013 if the sequester kicked in. We could lose up to 750,000 jobs. Those furlough notices will start going out. People are -- you know, sitting around their kitchen table tonight and wondering if their child who is on a Head Start program is going to lose that slot because of a lack of funding.

BLITZER: All right.

CARNEY: You know, this is -- these are real people with real world effects.

BLITZER: Look, everybody --

CARNEY: And there's no reason -- Wolf, there's no reason for this to happen.

BLITZER: Everybody agrees --

CARNEY: There's a reasonable outcome here, a reasonable compromise to be had.

BLITZER: This is the worst way to cut spending, everybody appreciates that -- agrees you've got a week to try to work out a deal and hopefully, you can, because we don't want those kids not having a little Head Start program or food or whatever it takes. Obviously, we want air traffic controllers on the job. TSA on the job.

CARNEY: That's exactly -- that's --

BLITZER: And we want those military personnel on the job as well. So a lot at stake, and hopefully the president, Boehner, Mitch McConnell, and the Democratic leadership, all you guys can get together and work out a deal. That's what the American people want, we hope you can do it.

CARNEY: Well, I thank you. And I just want to point out, Wolf, that, you know, it's true that the tax rates went up on the top earners in this country, millionaires and the billionaires, as part of the fiscal cliff deal, and with that achievement the president has signed into law $2.5 trillion in deficit reduction.

BLITZER: All right.

CARNEY: And what your viewers need to know is of that $2.5 trillion, more than two-thirds has come in spending cuts. Two-thirds. That's a ratio of 2 to 1, spending cuts, to raise revenues. That's balance. That's significant spending cuts. The president has put on the table offers that include entitlement reform savings.

BLITZER: All right.

CARNEY: This is not revenue alone, it's a balanced, middle-of- the-road approach. And we urge Republicans to take it up.

BLITZER: Let's see what happens over the next few days.

Jay Carney is the White House press secretary. Thanks very much for coming in.

CARNEY: Wolf, always glad to be with you. Thanks.

BLITZER: Thank you.

And when we come back, for some of "Lincoln's" extras this weekend means a whole lot more than just a gold statue.


BLITZER: In the hit movie "Lincoln" the extras are special.

Here's Barbara Starr.


BARBARA STARR, CNN PENTAGON CORRESPONDENT: In Steven Spielberg's "Lincoln" an exhausted and tormented president tours the civil war battlefield. But Daniel Day-Lewis was only playing the president, some of the movie's soldiers weren't just acting.

Two years after losing his legs in an IED explosion in Afghanistan, Marine Corps Staff Sgt. Joey Jones was one of three veterans cast in the acclaimed film.

JOEY JONES, FORMER MARINE CORPS STAFF SERGEANT: As a Georgia boy, you're kind of intimidated by Hollywood.

STARR: Spielberg, is a long-time supporter of veterans, wanted real military amputees for this crucial scene where Lincoln visits a hospital.

JONES: Before they shot the scene, Steven Spielberg came in, and I don't know -- I got the impression he was positioning us to where the veterans would be closest to the camera.

STARR: Jones shot three scenes, you only see him in this one.

DANIEL DAY-LEWIS, ACTOR, "LINCOLN": Are you getting enough to ear?

STARR: Watch again. His one line.

JONES: President. John.

DAY-LEWIS: John. I've seen you before.

JONES: The president is going to come in and we're going to film him, say hello to you and greet you like he really did back then in the war.

STARR: Just six seconds, but it left an impression.

JONES: I have had dinner with the current president, President Obama, and when Daniel walked into the room, I think that, in my mind, I got more of the feeling of respect for a president. For at least five minutes, I shook President Lincoln's hand. That is what it felt like.

STARR: It would become a friendship between the young Marine and the actor.

JONES: So once the camera crew left and whatnot, he was Daniel Day-Lewis, and we spoke. And he was just probably the nicest celebrity I have ever met.

STARR: Lewis even came to Jones' wedding a few months later. JONES: I have had a few jokes back and forth about who my favorite president was, because I have met President Obama and him. And...

STARR (on camera): And who is your favorite president?

JONES: We will settle on Theodore Roosevelt. So...

STARR (voice-over): Barbara Starr, CNN, Washington.