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Forced Spending Cuts Less Than Seven Hours Away; Interview With Gov. Rick Snyder; Detroit Financial Situation; Interview with Rep. Peter King; Ashley Judd to Run for Senate?; Diplomatic Firestorm Erupts Between U.S. Allies; Groupon CEO Fired; Was Show Dog Poisoned?

Aired March 1, 2013 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: And you're in the SITUATION ROOM. Happening now, President Obama warns the pain will be real. Just hours before forced spending cuts hit Americans all across the country.

BERMAN And the embattled CEO of the popular daily deal site, GroupOn, makes a dramatic exit from the company he co-founded.

Also, a show dog dies only days after the renown Westminster dog show. Why a vet suspects poisoning and its owner suspects foul play?

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: $85 billion once again of forced spending cuts about to kick in all across the country less than seven hours from now, all because Republicans and Democrats here in Washington failed to come together once again to stop it from happening. Just hours ago, a feisty President Obama entered the White House briefing room. He laid the blame squarely at the feet of the GOP.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: None of this is necessary. It's happening because a choice that Republicans in Congress have made. They have allowed these cuts to happen, because they refused to budge on closing a single wasteful loophole to help reduce the deficit.

As recently as yesterday, they decided to protect special interests tax breaks for the well-off and the well-connected, and they think that that's apparently more important than protecting our military or middle class families from the pain of these cuts.


BLITZER: Chances are you're going to eventually feel these cuts at least one way or another and our CNN reporters are covering every angle of the story. Let's get straight to Capitol Hill. Our chief Congressional correspondent, Dana Bash, is standing by. Dana, so, what's the Republican reaction? What are they saying now? Is there a risk of a domino effect being set in motion here? What's going on?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Oh, there's always that risk, but you know, Wolf, the president said that he wants to stop careening from one crisis to another, but thanks to a budget process that Congress passed and the president signed into law. We are going to continue to do that, and another Washington drama is right around the corner.


BASH (voice-over): The House speaker walked out of an unproductive White House meeting about spending cuts going into effect now, and instead, focused on the next looming crisis, the end of this month, March 27th, when funding for the government runs out.

REP. JOHN BOEHNER, (R) HOUSE SPEAKER: I'm hopeful that we won't have to deal with a threat of a government shutdown while we're dealing with the sequester at the same time. The House will act next week and I hope the Senate will follow suit.


BASH: John Boehner and House Republicans plan to pass a bill next week to keep the government funded through September 30th, the end of the fiscal year, and along with that, deal with some of the pain from forced cuts going into effect now, just for the military, by giving the Pentagon some leeway in its new budget.

REP. MAC THORNBERRY, (R) ARMED SERVICES COMMITTEE: It is going to help update the categories which will reduce some of the damage.

BASH: But that does not necessarily mean crisis averted. Why? Congressional Democrats are skeptical about helping the military and not other Americans hit by spending cuts like children and head start (ph) programs.

SEN. BARBARA MIKULSKI, (D) APPROPRIATIONS COMMITTEE CHAIR: We need to have programs in there, the need compelling (ph) human need, housing, education, health care, and we also need to look at transportation.

BASH: Senator Barbara Mikulski who heads the community and charge of spending at work while most of her Senate colleagues are home for the weekend, expressed frustration that Congress is gone.

MIKULSKI: I'm here. I'm ready to go. I'm waiting for the photo-op at the White House to come here to give me instructions.

BASH: Speaking of Congress skipping town, the president took note of the empty capital while trying to put real life faces on forced spending cuts.

OBAMA: Now that Congress has left, somebody's going to be vacuuming and cleaning those floors and throwing out the garbage. They're going to have less pay. The janitors, the security guards. They just got a pay cut, and they've got to figure out how to manage that.

BASH: But we checked on that, and it turns out the president was not exactly right. The Senate sergeant at arms told CNN neither Capitol police nor janitors will see salaries slashed, only limited overtime. The only annouced effect so far at the Capitol is some entrances will close, a small inconvenience to lawmakers and their aides.


BASH (on-camera): Now, when it comes to the prospects of a government shutdown, the president made it pretty clear today that he does not want that to happen, and Wolf, I'm told that Senate Democrats took that as a signal that they better figure out a way for them to actually bridge their differences, very real differences over the budget in the next potential shutdown with Republicans in the House.

BLITZER: What's the difference between giving the president some flexibility and how to deal with these spending cuts as opposed to the leeway that some Republicans want to give them? There's a nuance here that potentially could be important as far as a government shutdown.

BASH: There is an important nuance. I'll try to do this without my weed whacker. We spent a lot of time this afternoon on the phone with people who are experts on this, but the bottom line is that when you talk about the term flexibility in budget terms, that is a signal that it would give the president a lot of ability to move money around, which Democrats and Republicans, mostly Democrats at this point say that they don't want to do because it gives up Congress' power of the purse and for a lot of other reasons.

The way that the House Republicans are writing this legislation is more about giving -- and, again, this is the controversy from their perspective, which is the Pentagon, giving the Pentagon the ability to deal with some of the shortfalls in the Pentagon budget from these forced spending cuts and from other problems of the past three years of not having new spending bills pass because they've just been kicking the can down the road.

So, that is the big difference. But again, when you look at the bigger level difference between the parties, it's that Republicans want to just deal with the military and Democrats say, well, if we're going to try to help the military, we want to help everybody else domestically. And that really is the fundamental -- again, philosophical issue that we're probably going to see play out over the next couple of weeks.

BLITZER: Nobody wants to see the government shutdown, but the devil, as we say, is in the details. All right. Dana, thank you very much.

Just a little while ago, the new defense secretary, Chuck Hagel, gave some strong warnings about these forced cuts. Our Pentagon correspondent, Chris Lawrence, is covering this part of the story. What did he say, Chris? CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, we have now learned that the navy is going to shut down an entire air wing in April. Now, the navy only has nine of these, and these squadrons of jets are the primary fire power onboard aircraft carriers. The navy will also shut down three more air wings over the course of the year.


LAWRENCE (voice-over): Wars have been planned inside the tank, this secure room in the Pentagon few get to see.

UNIDENTIFIED MALE: Mr. Secretary, welcome to the tank.

LAWRENCE: Now, it's where military officials are making plans to cut $46 billion from their budget.

CHUCK HAGEL, DEFENSE SECRETARY: Effectively immediately, air force flying hours will be cut back.

ASHTON CARTER, DEPUTY DEFENSE SECRETARY: If you stop training for a while and you're a combat pilot, then you lose your rating, and eventually, can't fly at all.

LAWRENCE: Here's what's already happened. The Pentagon warned its 800,000 civilian workers to expect furloughs and instituted a hiring freeze. It also curtailed building maintenance. The navy postponed the U.S. Harry Truman's deployment to the Persian Gulf and delayed the overhaul of the USS Lincoln.

Here's what happens next. The Pentagon will cancel maintenance on 25 ships and nearly 500 aircraft. The army will cut training time for most soldiers. Down the road, it could lead to a delay in deploying troops to Afghanistan.

UNIDENTIFIED MALE: We'll have to make a decision somewhere along the line to either extend those already there or send people there that are not ready.

LAWRENCE: And families will have to wait longer for veterans' funerals at Arlington. Furloughs will be fewer people to schedule services and dig graves.


LAWRENCE (on-camera): Now, not all civilians workers are going to be furloughed. But for the ones that are, they're going to get an official notice in the next two weeks. And starting in April, they will likely lose one day, you know, per week, lose one day of pay per week for about 22 weeks, Wolf.

BLITZER: That's 20 percent of their salary. That's significant. All right. Chris Lawrence, thank you.

Some of the Obama administration are warning that these forced budget cuts could take on a big toll on children. Our national political correspondent, Jim Acosta, is here in the SITUATION ROOM looking into this part of the story. What do you see?

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, all week, cabinet secretaries have been warning of all of the various ways these cuts will hurt. Republicans have accused the administration of hype, and now, the nation is about to figure out who's right.


ACOSTA (voice-over): When two cabinet secretaries visited this elementary school just outside of the nation's capital, there was music and even a reading of the Dr. Seuss classic, "Green Eggs and Ham".

UNIDENTIFIED FEMALE: I do not like green eggs and ham. I do not like them.

ACOSTA: All of it stage to drive home their point that it's the kids who will have to swallow some of the forced budget cuts.

ARNE DUNCAN, EDUCATION SECRETARY: Dumb government at its finest.

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: I guess I'm a little more blunt. To me, it's stupid government.

ACOSTA: The secretaries Arne Duncan and Kathleen Sebelius were careful not to accept any of the blame.

(on-camera) Didn't this dumb and stupid idea come from the White House?

SEBELIUS: Actually, the idea was designed in such a way and really inserted in the bill by Congress because they thought it was such a bad way to run government that it would never happen.

ACOSTA (voice-over): Worried about how the cuts will affect the schools' programs for at-risk children, the head of the PTA, Mindy Kassarba, has a message for the politicians.

MINDY KASSARBA, ROLLING TERRACE ELEMENTARY SCHOOL PTA PRESIDENT: I think that they need to grow up. Act like our children would. Talk to one another. Resolve the conflict. Maybe they need to come to the playground.

ACOSTA: Perhaps, they might need fifth grader, Erik Perez.

You're worried that it might hurt your school?

ERIK PEREZ, ELEMENTARY SCHOOL STUDENT: it might hurt my school, it might hurt my education, the teachers.

ACOSTA: It's not just cuts at schools. Across Washington, reality is settling in for federal workers.

UNIDENTIFIED FEMALE: I know I will get furloughed. I've accepted that. ACOSTA: The furloughs, as it's explained in this letter to justice department employees says, "you will be in a non-pay, non-duty status." Back at the school, Arne Duncan tried to clarify his own comments about job cuts from earlier this week.

DUNCAN: These are teachers who are getting pink slips now.

ACOSTA: When he seemed to suggest teachers were already being laid off.

DUNCAN: That's not what I said. That's not what I meant. But let's not --

ACOSTA (on-camera): You said now. You said they're being laid off now.

DUNCAN: I said they're getting slips now, notices now. So, that's, I think, were some of the misunderstanding was.

ACOSTA (voice-over): Mindy Kassarba says, perhaps, it's time for both sides to go back to school.

KASSARBA: If there's a conflict on the playground and two kids want the same basketball, they have to talk. They have to decide. They may not be friends. They may never be friends, but they have to decide that one gets it for a little bit and then you get it later.

ACOSTA: What a concept. Sharing. Something like that.

KASSARBA: Negotiating.

ACOSTA: Yes. Negotiating.

KASSARBA: Compromise.

ACOSTA: Compromise.



ACOSTA (on-camera): For now, there is no talk of compromise. Both sides are still holding their ground and the budget knives are coming out. And Wolf, as far as it stands right now, these cuts won't be saved by the bell.

BLITZER: They won't be, indeed. They're going to go into effect, although the pain won't really be felt, I'm guessing, at least for two or three or four weeks.

ACOSTA: That's right. And that's when we're going to find out who's right in this scenario. There's been all this criticism of Arne Duncan, the various cabinet secretaries. They've been accused of hyping these numbers and so forth, but when the cuts start settling in and people start feeling them, then perhaps, we might have to revisit those conversations. BLITZER: I'm sure they will. Thanks very much.

ACOSTA: You bet.

BLITZER: Anderson Cooper, by the way, is going to have a lot more on these forced spending cuts later tonight, 8:00 p.m. eastern. Republican senator, John McCain, will be his special guest. He'll talk about what it's going to take to get out of this mess.

When we come back, the governor of Michigan announced his plans for an emergency takeover to pull Detroit back from the brink of bankruptcy. The governor standing by to join us live. That's next.

Plus, a show dog dies only days after the legendary Westminster dog show. Why the owner now suspects foul play?


BLITZER: The city of Detroit is so broke the state of Michigan is now taking over. The city is on the hook for more than $14 billion, including unfunded pensions, health care costs for retirement government workers, among all sorts of other things. Michigan's governor said today the state is ready to take over operations of Detroit City government.


GOV. RICK SNYDER, (R) MICHIGAN: If you go across the country and talk to people, there is probably no city that's more financially challenged in the entire United States. If you look at the quality of services, the citizens, it's ranked among the worst. So, we went from the top to the bottom over the last 50 or 60 years.


BLITZER: And in that process, Detroit has lost more than half of its population. Governor Rick Snyder is joining us now live. Governor, thanks very much for coming in.

SNYDER: Happy to be with you, Wolf.

BLITZER: It's an awful situation in Detroit that's going on right now. Walk us through what's going on, what's going to happen. This emergency manager who's going to effectively take charge of the city, what will this person do?

SNYDER: Well, it's actually an opportunity to bring more resources to bear. I don't view it as an alternative to city government. It's really to bring more tools to bear to say, bringing in an emergency manager allows us to work with the mayor and city council.

All people in the city to say, let's make faster decisions, let's make better decisions, let's bring more tools to bear to start turning this around because people have worked on this, as I said, on those comments, for 50 or 60 years. Good people, but they were not successful in turning the direction of Detroit around. It's time. The citizens of Detroit deserve better services. The financial crisis needs to be resolved and we've used this tool successfully in other cities in Michigan. Let's bring the emergency manager in as an opportunity and move forward. So, there's a ten-day appeal's period I'm waiting to go through with the city, but after that, unless, there's something dramatic, we'll move ahead with this process.

BLITZER: And -- who has the final word, this new emergency manager or the mayor, Dave Bing?

SNYDER: If there's an emergency manager, the final word is with the emergency manager. But again, it's important and I want to create a role for the mayor to be part of the solution. This is a situation that's difficult enough that you don't say it's Detroit versus Michigan. It's Detroit, Michigan.

And how can we really work together as a team to say after all these years, after all the fighting and conflict that's gone on in the city and all these different issues, let's come together, let's solve problems, and give a solution because that's what the citizens of Detroit and the citizens of Michigan deserve and want.

BLITZER: Some of the politicians, some of the folks in Detroit aren't very happy with this decision to name an emergency manager. In fact, some are calling it undemocratic. The city council is considering filing a lawsuit against the state, meaning you as the governor. What's your reaction to that?

SNYDER: Well, that's unfortunate, because again, that's more fighting. If you go back to last April, I did a consent agreement with the city to say here's a list of 21 different items that needed to take place. A number of those items haven't been done yet and a number of them, they didn't even start working on until September.

So, it's not to blame them, but we need better results. So, the starting point for an emergency manager coming in are to take the 21 items that the city, itself, said, these are important things that need to be done, that we all agree are important things and they would work on.

So, I view it as really trying to get an alignment to say let's do the things we all know we need to do, but get them done and get them done right and let's get our citizens better services and a better life.

BLITZER: Here's what mayor Dave Bing of Detroit told me here in the SITUATION ROOM last week. Listen to this.


MAYOR DAVE BING, (D) DETROIT: The state has not been as good to Detroit as I think they should have been because we lose revenue sharing based on our population loss. And so, there's just so many other (ph) things right now and most of it revolves around revenue. And, you know, we can't cut our way back out of this problem.

I think we've cut as much as we can cut. We've got to think about how we can raise revenue again.


BLITZER: All right. So, what's your response to the mayor?

SNYDER: Well, again, the state is not the answer to the solution. It's not about bailing out the city. It's about getting the financial stability. We have issues in the state of Michigan when i took office. We had a billion and a half dollar deficit. We dealt with it. We've dealt with long-term liabilities in the state of Michigan.

The city of Detroit has about $14 billion long-term liabilities. It's time to call the creditors together to say let's have a discussion. Let's has through it. Let's look at restructuring debt and do it in a way where the citizens can get better services, there can be payment plans in place, and we can move forward because the answer here is not continuing to watch Detroit go downhill.

It's about growing the city of Detroit because there are a lot of great things going on in the city beyond the challenges of the finances.

BLITZER: What's your timetable assuming that this emergency manager takes charge? How long is it going to take to turn things around in Detroit?

SNYDER: Well, again, there's this ten-day appeals period, but then, assuming nothing changes dramatically, we're going to move forward. And I think you'll see changes happening that are positive fairly quickly, but this is going to be a longer term situation, too. It took 60 years to get in this situation, so it doesn't happen overnight. But in terms of seeing positive results to citizens, I think you'll see that in a matter of weeks to months.

BLITZER: Well, good luck, governor. We hope that Detroit makes a comeback. It's a great, great city. It's going through, as you point out, horrible times, not just in recent years but for a long, long time. These problems, as you correctly point out, have been created over many, many decades, and now, you've got to deal with it.

And we hope everyone in Detroit comes through and Michigan as well. Governor, thanks very much for coming in.

SNYDER: Thank you.

BLITZER: And coming up here in the SITUATION ROOM, a well-known Republican says he's outraged at Florida's Republican senator, Marco Rubio. Why he wants Rubio and others politicians to think twice before coming to New York. What's going on? We'll tell you right here in the SITUATION ROOM.


BLITZER: The queen of England has fallen ill. She's been forced to cancel a trip. Lisa is back. She's been monitoring that and some of the other top stories in the SITUATION ROOM right now. What happened? LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, Queen Elizabeth, she has been sidelined by a gastrointestinal bug. The 86-year-old monarch has been forced to cancel a trip to Wales that was scheduled for tomorrow. Buckingham Palace says the queen will rest this weekend at Windsor, her country estate, where she is being monitored.

And American officials confirmed that a top official of al Qaeda in North Africa has been killed. He apparently died last month in Mali during an airstrike by French and Chadian forces. U.S. officials say he was a senior commander, and his death is a blow to al Qaeda in that part of the country.

A determination today by the medical examiner of Chicago about the man who died after winning more than $400,000 in the lottery. There was no trace of cyanide found in his body, which was exhumed in January, but the medical examiner still says that he was murdered back in July. That cyanide was found in blood samples taken after his death. Cyanide t can evaporate quickly from the body. Hence, he says, that explains no trace of it all after all of these months.

And it's still winter on the shores of Lake Michigan. Ice boulders weighing up to 50 pounds have turned up along Sleeping Bear Dunes National Lakeshore. One official says they are bigger this year than they normally are, but they're certainly creating some nice little pictures. It looks like a little fun for some people who want to have a little fun there in the snow, Wolf.

BLITZER: Build a nice snowman.


SYLVESTER: That's right. It looks like the dog is really interested in it, too.

BLITZER: It's snow. That's what happens.

SYLVESTER: That's what we expect, right, Wolf?

BLITZER: Thank you.

The actress, Ashley Judd, she's now here in Washington, once again fueling lots of speculation about a potential Senate run in Kentucky against Mitch McConnell. What's going on? We're going to update you when we come back.


BLITZER: New Yorkers aren't suckers. That's the warning that the Congressman Peter King has for some fellow politicians.

Congressman King specifically called out a fellow Republican, Senator Marco Rubio of Florida, in a very blunt e-mail to his constituents. He's outraged that Senator Rubio had fundraising meetings in New York yet voted against the $60 million aid bill for Hurricane Sandy victims.

Congressman King is joining us now.

I think it's more than $60 million. I think it's $60 billion, just to be precise on that. There's a lot of difference between a million and a billion.

So what motivated you to issue this really blunt attack?

REP. PETER KING (R), NEW YORK: Well, Wolf, believe it or not, I didn't enjoy doing it. I mean, I've met Marco Rubio. I think he's a very nice guy. He's a real future for the Republican Party. But I've just had enough of politicians, especially Republican congressman and senators, who vote against aids New York -- make anti-New York speeches all the time, then come into New York and they raise money on Wall Street and the Hamptons.

And in Senator Rubio's case, he's from Florida, which has received tens of billions of dollars over the years in hurricane aid, and yet when New York and New Jersey had their worst natural disaster ever, when I had constituents of mine lost their homes, lost their jobs, the local governments were literally going broke, and yet when our aid package come up -- and this aid package, by the way, put aside all the nonsense. There was no pork in there. The bill would come up for a vote in the House and then went to the Senate, was drafted at the request of the Republican leadership.

We told them, you only put in there what you think is necessary. Governor Cuomo, Governor Christie, Mayor Bloomberg submitted what they thought was necessary. The final package was put together by the Republicans on the Appropriations Committee and the House leadership. So there's none of this -- all this talk about pork is nonsense. Senator Rubio voted against it. Never came to New York to inspect the damage, never spoke with Governor Cuomo or Mayor Bloomberg, as far as I know with Governor Christie, he just voted no. As if this is accepted policy that Republicans -- national Republicans could vote against New York.

That's bad enough. Then I understand he's in New York trying to raise money apparently for his presidential campaign.

I was thinking in my case, if I had voted against aid to Louisiana after Katrina, I wouldn't have thought of going to New Orleans to raise money or if I had voted against aid to Florida after a hurricane, I wouldn't have thought of going to Miami to raise money for myself. So I just think it's time that we in New York sent a signal we've had enough. We're not going to allow this to go on where politicians can -- can attack New York, vote against New York. And this was -- we're not looking for a bridge or a tunnel or some special projects. This is life and death we were talking about.


BLITZER: Did you ever -- did you ever vote against any of those appropriations, emergency funding for victims of a hurricane, or an earthquake or a tornado or any kind of disaster elsewhere in other parts of the country? KING: Wolf, I never even thought about voting against it. Of course not. No one -- I don't know anyone from New York who did. I've been in Congress over 20 years and I know with Katrina, within 11 days we had voted $64 billion for Louisiana and Mississippi after Katrina. That was within 10 or 11 days we did that.

In New York we had to wait for 100 days, that was during the cold winter, before $60 billion -- $61 billion was voted, again, for the worst disaster we've ever had.

No, I never voted against it, I don't know anyone from New York who did, Republican or Democrat. Never entered our minds. And yet the overwhelming majority of Republicans in Congress, in the House and the Senate, over 80 percent, voted against this aid package to New York and New Jersey.

And, you know, this isn't some liberal kabow (ph), this was Chris Christie who was the hero of the conservatives last year when they asked him to campaign for them all over the country.

BLITZER: He's not much of a hero apparently among some conservative circles right now, Chris Christie. He wasn't even invited to this CPAC conference that's going to be taking place in the coming days here in Washington. What do you make of that?

KING: That's a suicidal death wish. CPAC to me loses all credibility. You have a governor who is conservative, who's balanced a budget, who's taking on public employee unions, he's pro life and yet he has a 74 percent favorable rating in a Democratic blue state. So here's a person who's shown that blue collar conservatism works, that it appeals to working men and women, that it appeals to women.

And these are the areas where we've been suffering. Chris Christie is doing the job but they said because he fought for the aid for New Jersey, which he was entitled to, the same aid that every other state has always gotten, he won't be accepted. To me that writes off CPAC as a serious force. Should be -- write them off as a serious force. What's disturbing is, this now becomes like the opening inning in the race for the presidency in 2016.

Why do Republicans are allowing CPAC be somehow the door you have to go through to get yourself in the race is wrong. I think Republicans should say they're not going to CPAC. If you can't accept Chris Christie as a conservative, then you're really just asking for another election loss in 2016 and it makes us look crazy in the eyes of the American people.

BLITZER: I guess you're not going to get an invitation to CPAC yourself, Congressman, at least any time soon.

Now there was one headline that jumped out at me from "The Atlantic." "Peter King Declares Civil War against Southern Republicans." This is from "The Atlantic" magazine, the wire that they had. What do you make of that headline?

KING: Well, my wife is in Atlanta, Georgia, so probably my in-laws will be mad at me about that. No. This is not -- what I am concerned about, though, is the fact that other sections in the country, in the Republican Party, seem to have written off the northeast. They take us for granted and, listen, I'm not here looking for sympathy. I don't want to be going around like a third-world beggar asking for money.

But when we had this devastating storm, I was really surprised by people that I work, people saying, go to me with every day, and we're all in this, you know, all one team standing together and suddenly they just one after the other voted against aid to New York and New Jersey when our people were suffering. It was beyond me.

I mean, I couldn't have imagined, for instance, back in 2005 even considering voting against aid to Louisiana or Mississippi. And by the way, a number of members from those states did vote with us. Florida, not so much. And they've gotten tens and billions of dollars over the years. But, no, it's -- I think that we've taken on a -- we have a very puritanical green eye shade, arid approach to politics. Too much -- it's too judgmental. I'm pro life, I'm conservative, but I also understand that I -- I don't believe that I have a biblical knowledge of all the issues facing the country.

These are issues that are not issues that to me should address -- you know, is not asserted to, that the budget has to be balanced in 10 years, we have to do this in 9 1/2 years. We have to have X dollars. The idea is to make the government work the way Ronald Reagan did.

BLITZER: Congressman Peter King, thanks very much for coming in.

KING: Thank you, Wolf.

BLITZER: I just want to point out we've invited Senator Rubio to come here to THE SITUATION ROOM this week as well. Hopefully in the next few days he'll accept our invitation. We'd love to discuss this and a whole bunch of other issues with Senator Rubio, including his recent visit to Israel.

The actress Ashley Judd was back in Washington today, once again fuel a lot of speculation that she could be considering a possible Senate run in Kentucky.

Let's bring in CNN's Erin McPike. She's been watching what's going on. So what did -- what did you hear? What did she say about a possible Senate run?

ERIN MCPIKE, CNN CORRESPONDENT: Well, no one asked her about a Senate run directly but when it did come up she said, is there an elephant in the room? That was it.

BLITZER: That was -- she was giving a speech at George Washington University on what?

MCPIKE: Well, it was a very rambling speech that went back and forth from her eastern Kentucky roots to her meandering career path and to her passion for reproductive health for women all around the world. So let's take a listen. (BEGIN VIDEOTAPE)

ASHLEY JUDD, ACTRESS: My triple great grandfather, Elijah Hensley, from Martin County, Kentucky, who was a civil war hero for the union cause and suffered a battlefield amputation, was a prisoner of war three times, a remarkable fellow. I would go anywhere but Yemen. I'm still scared of Yemen. I don't know why but I'm really scared of Yemen.

I hear that Congo is the worst place to be a woman. I've been there four times but I hear Yemen might be a little worse.

My thought is that you found your pig and you should stick with your pig. And what I mean by pig is we all have to find the thing that makes us mad. And the thing that gives us the fire in the belly and the passion and the stamina to stick with it.


MCPIKE: And at one point she also pointed out that she was one of the highest paid women in Hollywood history. So of course when I asked a Democratic official what he thought of this he said, I haven't paid any attention to it.

BLITZER: And I know from people who are close to what is going on in Kentucky, there's some -- she's seriously considering running against Mitch McConnell, assuming he gets through a primary if he's challenged by a more conservative Republican, gets the Republican nomination. That could be quite a bruising battle.

MCPIKE: It could be just because she could raise so much money, bring in so many Hollywood dollars that it could be a real nuisance for Mitch McConnell because he's going to have to raise so much money himself, too.

BLITZER: Erin, thanks very much for that report. If you get some new information. Let us know.

MCPIKE: I sure will.

BLITZER: Just ahead, John Kerry's first big challenge as the United States secretary of state. What to do when one country says something malicious about another friendly country? Stand by.


BLITZER: The Secretary of State John Kerry found himself in the thick of a Middle East fight today between two key U.S. allies. The Turkish prime minister linked the Jewish philosophy of Zionism with crimes against humanity, something Kerry called, in his word, objectionable.

Our foreign affairs correspondent Jill Dougherty is traveling in Turkey with the secretary.

This is his first international trip. JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Wolf, John Kerry is just halfway through his first international trip as secretary and it's getting more intense.


DOUGHERTY (voice-over): Secretary of State John Kerry stepped off the plane in Turkish capital Ankara and ran head on into a diplomatic firestorm. Comments made Thursday by the Turkish prime minister whom he was scheduled to see in just a few hours.

RECEP TAYYIP ERDOAN, TURKISH PRIME MINISTER (Through Translator): Just like Zionism, just like anti-Semitism, just like fascism, it has become inevitable that Islamophobia to be seen as a crime against humanity.

DOUGHERTY: Kerry raised the issue at his first stop, the Foreign Ministry.

JOHN KERRY, SECRETARY OF STATE: If we found that objectionable. But that said, that said, Turkey and Israel are both vital allies of the United States and we want to see them work together in order to be able to go beyond the rhetoric and begin to take concrete steps to change this relationship.

DOUGHERTY: But in an awkward moment, standing next to Kerry at the microphones, the Foreign minister defended his colleague's statement, attacking Israel for killing eight Turkish citizens and one American in the 2010 Gaza flotilla raid.

AHMET DAVUTOLU, TURKISH FOREIGN MINISTER (Through Translator): If Israel is expecting to hear positive comments from Turkey, they need not only to revise their attitude toward us but also toward the settlements in the West Bank. And toward the people of the region.

DOUGHERTY: Friday evening, Kerry met with Prime Minister Erdoan at his residence, in front of the cameras, no mention of the comment flap.


DOUGHERTY: U.S. officials say they're concerned that the once extensive cooperation between Israel and Turkey has broken down. They call that deeply unfortunate. And they say it's having a corrosive effect on relations with the United States -- Wolf.

BLITZER: Jill Dougherty, thanks very much.

When CEOs are fired from major companies, they often get a few million dollars in cash or stock to cushion the blow. Coming up, why Groupon's CEO will take home a severance package of less than $400.


BLITZER: You may have gotten a sweet deal from the Web site Groupon before, but the same can't be said for the company CEO. Groupon co- founder Andrew Mason was fired yesterday with a severance package of, get this, $378.

Lisa Sylvester is walking into THE SITUATION ROOM. She's taking a closer look at how this came to be.

What happened?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, first off, you know that severance package, obviously, that's not the deal of the week but that is what he asked for in his contract. And there are actually a lot of quirky things about Andrew Mason, including his parting letter.


SYLVESTER (voice-over): Groupon's corporate culture has always been button-down, way button-down. Here's Groupon's Customer Service Team celebrating National Dance Day. It's founder, 32-year-old Andrew Mason, summed up his philosophy in Groupon's IPO filing, quote, "Life is too short to be a boring company."

The company touted itself as a way for people to save money and companies to boost sales.

ANDREW MASON, FOUNDER, GROUPON CEO: There's never been such an effective way to get customers in the door. In one day, we're often able to bring in thousands of new customers for a small business.

SYLVESTER: And have a little fun along the way. This picture is posted on his Facebook page saying he once spread a rumor in the office he owns 20 cats and the company has a scholarship foundation called Grouspawn for children and parents who used Groupon for a first date.

JULIANNE PEPITONE, CNNMONEY TECH WRITER: He wrote this whole letter to shareholders about how we might do really crazy, stupid things along the way. They talked about how they have gorilla suits in the office and dancing classes.

SYLVESTER: That colorful side may have suited Groupon when it was a young start-up. But Mason's quirky, irreverent side seems to have been too much for the company's board and shareholders. In a departure letter, Mason first posted on his Twitter account, he says, quote, "After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding, I was fired today."

The news wasn't surprising to those following the company. He's had a series of missteps. In 2010, Google offered to buy Groupon for a reported $6 billion. Mason said no and instead took the company public. Since its IPO, its stock value has plummeted. The company has had disappointing earnings reports. As the field became crowded with others, customers moved away.

RICK COSMEN, GROUPON USER: It's definitely not as hot as it used to be, you know, but I think it's still very beneficial for a lot of people. You know, I still buy but not as much. SYLVESTER: In his parting missive, Mason writes, "I'm OK with having failed at this part of the journey. If there's one piece of wisdom that this simple pilgrim would like to impart upon you, have the courage to start with the customer."


SYLVESTER: And a lot of these CEOs will leave a company with a golden parachute. But as we mentioned his severance is only $378.36. That was half of his annual salary. But he is still a millionaire several times over. He cashed out some shares before the IPO, netting more than $20 million and he still has shares that are worth at today's price more than $200 million. So the big question is, will he surface someplace else? He says he's going to take off a little bit of time. So we'll see what happens --


BLITZER: So we shouldn't feel bad. That severance package was low but he -- yet he he still has $200 million.

SYLVESTER: He still has $26 million or so in the bank from when he did sell shares and then on top of that he could sell shares today and have a cool $200 million.

BLITZER: We're not worried about him. He'll be just fine.

SYLVESTER: He's fine. And he's only 32 so --


SYLVESTER: Just 32 years old. Not bad.

BLITZER: Lisa, thank you.

When we come back, the mysterious death of a show dog who only a week earlier appeared at the prestigious Westminster Dog Show. Why the owner now suspects poison was involved.


BLITZER: It has all the components of a murder mystery. An unexpected death, whispers of poison. Only in this case, the victim, a show dog.

CNN's Mary Snow is joining us now with more of this bizarre mystery.

Mary, what are you learning?

MARY SNOW, CNN CORRESPONDENT: Wolf, few answers, a lot of speculation. In the highly competitive world of dog shows, there's finger-pointing and questions raised about why a healthy prize dog would suddenly die.

(BEGIN VIDEOTAPE) SNOW (voice-over): This was Cruz, a 3-year-old Samoyed, at the premier canine competition of them all, New York's Westminster Dog Show held in February. Days later, the dog died in Colorado. A vet there determining rat poisoning was one possible cause of death. But his owner suspects something more sinister, that someone deliberately gave the dog poison that wouldn't kill him right away.

LYNETTE BLUE, OWNER/BREEDER: Some deranged person -- I mean, they're out there and they do horrible things all the time. And, you know, it was somebody that they don't -- maybe they don't agree with, with people that raise and show dogs. They're just crazy.

SNOW: Lynnette Blue has no proof. She doesn't believe the dog ingested rat poison on his own since he was closely watched. Her purebred pet always flew coach. In New York, he stayed with his handler at the New Yorker which says it doesn't use rat poison. It even offers spa packages to show dogs.

Blue says she isn't ruling out animal rights activists who protest the shows. People for the Ethical Treatment of Animals calls any hint of suspicions hurled their way outrageous.

LISA LANGE, PETA: PETA has been long protesting the Westminster Dog Show. We're opposed to dog shows across the board because of what it does to these poor dogs and we think that definitely all cosmetic surgeries on dogs for dog shows should be outlawed.

SNOW: In Cruz's case, he had a procedure done on his vocal chords to quiet his bark and the dog's handler says a woman during the Westminster show called them cruel. But the Westminster Kennel Club downplays the likelihood of deliberate poisoning, saying none of roughly 2700 dogs at the show had any problems. Adding, "We have never, to our knowledge, had an incident at our show where a dog has become ill or was harmed as a result of being poisoned."

Back in 1865, "The New York Times" reported that eight dogs were poisoned the morning before the Westminster competition. The motive? Jealousy.

What happened to Cruz may never be known since the owner declined a necropsy, leading questions unanswered.


SNOW: Now the owner says she didn't have further testing done because for one she was upset at the time and she says she was advised tests probably wouldn't have shown anything if the dog had been poisoned days before. So the answers about what really happened will probably never be known -- Wolf.

BLITZER: Mary Snow, thank you.