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THE SITUATION ROOM

Pope Francis Gets to Work; Iranian Nuclear Threat; Interview With Michigan Governor Rick Snyder; Governor Picks Attorney to Lead Detroit; ICE: 2,200-Plus Illegal Immigrants Released; The New Pope's Biggest Challenges; Anger Erupts After Police Kill Teen; "Dream" Voyage Turns to Nightmare; Allowing Knives on Planes; Searching for Common Ground

Aired March 14, 2013 - 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: President Obama says it could take Iran just a year to develop a nuclear weapon. He calls that a red line for the United States and he is warning that all options right now are on the table.

The new pope gets down to work with a prayer and a simple sermon. And he shows a down-to-earth style by stopping to pick up his own luggage and is actually paying his own hotel bill.

And from dream voyage to another cruise ship nightmare. Stuck in a Caribbean, port passengers report power failures and toilet failures. Can Carnival get it right this time?

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

Let's begin with another record day on Wall Street, the Dow rising. Take a look at this, at least another 80 points to another new high.

It's the 10th straight up day, tying a winning streak set in 1996.

(STOCK MARKET UPDATE)

BLITZER: Just days before his first visit to Israel as president of the United States, President Obama is warning that Iran could be very close to a nuclear weapon and that the United States is prepared to do something about it. Watch this. He granted an interview to Israel's Channel 2.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It would take over a year or so for Iran to actually develop a nuclear weapon. But obviously we don't want to cut it too close. And what we're going to be doing is to continue to engage internationally with Iran, understanding that we have set up the toughest sanctions ever. It's having a significant effect.

(END VIDEO CLIP)

BLITZER: So, there is the president of the United States saying it could take a year, a year for Iran to develop a nuclear weapon. Let's discuss what is going on with CNN's Fareed Zakaria. His show, "FAREED ZAKARIA GPS," airs Sunday mornings here on CNN.

That's the first time I heard the president give such a specific timeline. Within a year or so, Iran could have a nuclear weapon. That sounds pretty ominous, Fareed.

FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: It does sound ominous. What it shows you is what a difficult diplomatic challenge the president has, because they're negotiating with Iran through the six- party talks which are taking place in Kazakstan, and there the United States has made some offers that are, you know, trying to help Iran move to a kind of win-win place.

But now he is managing the other dimension of this, which is Israel. He is trying to convince the Israelis that he is serious, that he sees that there is not an infinite amount of time, and he said later in that interview all options are on the table. When I say all options, I mean military force and we have substantial capabilities.

So he's trying to manage the Iranian clock as well as the Israeli clock.

BLITZER: So he wants to make sure, for example, when he heads off to Israel next week, he reassures the Israelis that he's all over this issue and that they should not necessarily think about unilateral Israeli military action.

ZAKARIA: Precisely. The administration's view to Israel has been all along, don't do it, guys. You don't have the capabilities. You will destroy the international coalition we have brought together. You will perhaps retard Iran's development by a year or so. If it needs to be done, the United States has the capability.

And what he is trying to convince them there is, we will use it. I recognize that this -- you know, this can't go on forever. I think that's why he talked about the year to give them some sense of the specificity with which he understands this is a window, not an unending process.

BLITZER: Let me talk about Afghanistan with you for a moment, Fareed, because the commander of U.S. and international forces in Afghanistan issued an alert in effect today to all U.S. and coalition troops to raise their level of readiness, if you will, because of recent comments made by the Afghan president, Hamid Karzai.

Among other things, General Dunford: "His remarks could be a catalyst for some to lash out against our forces. He may also issue orders that put our forces at risk."

This is a major, serious escalation of the problem over there. If the U.S. commander, and there are still 66,000 U.S. troops in Afghanistan, is now worried that Hamid Karzai's remarks could endanger those U.S. and other international forces, the question is, what's going on?

ZAKARIA: What's going on is Hamid Karzai is trying to garner cheap popularity by equating the United States with the Taliban, which he did in some senses.

I think we should stand up to it very formally. I think we should have had a stronger rebuke of him. And I think we should make clear is that this kind of behavior will result -- will have a significant impact. The problem is Karzai is on the way out. So we should also not overreact and recognize he does not speak for Afghanistan. There are other Afghans. There is a, you know, complicated game going on here with domestic politics.

But I do wish that Senator Hagel -- Secretary of Defense Hagel had been tougher in rebuking Karzai on that issue.

BLITZER: Karzai wouldn't even hold that traditional joint news conference with the new defense secretary. That was a real slap in my opinion of what's going on. And the question is, should the U.S. -- and if you can give me a quick answer, should the U.S. accelerate the withdrawal of those 66,000 troops? They're all supposed to be out by the end of 2014. But the pressure is mounting to get them out even more quickly.

ZAKARIA: No. We want Afghanistan to be stable not just for the Afghans, but for our own reasons. We don't want a Taliban-controlled state. We don't want an al Qaeda-controlled state.

BLITZER: Fareed Zakaria, thanks very much.

Fareed's program, by the way, Sunday morning 10:00 a.m. Eastern, also 1:00 p.m. Eastern only here on CNN. Special guest this Sunday, Paul Wolfowitz, the former deputy secretary, one of the architects of the war in Iraq. We are now approaching the 10th anniversary of the start of that war that removed Saddam Hussein from power.

We are getting word right now that a suspect is held in Libya suspected of involvement in the attack on the U.S. Consulate in Benghazi. That attack last September killed four Americans, including the U.S. ambassador.

Our national correspondent, Susan Candiotti, is joining us now with the latest details.

What are we learning, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, Wolf.

Authorities have detained a suspect in connection with the September 11 attack on that U.S. diplomatic compound in Benghazi. Two sources are telling me and CNN terror analyst Paul Cruickshank, both sources identifying him as Faraj al-Shibli. Nasdaq one source briefed on the arrest says al-Shibli was detained in just the past couple days and he had recently returned from a trip to Pakistan according to a source.

Now, it is unclear whether he will be charged in connection with the case, which resulted in the deaths of four Americans, including Ambassador Chris Stevens. The 46-year-old al-Shibli comes from a town about 50 miles from Benghazi. He was a member of a militant organization called the Libyan Islamist Fighting Group that tried to overthrow the Gadhafi regime in the mid-'90s.

In 1998, he was named with two other Libyans for his alleged involvement in the murder of a German counterintelligence official and his wife who were killed in 1994. And, by the way, an arrest warrant for Osama bin Laden was also issued at that same time by Libyan authorities.

Now, in 2004, the Libyan government reported that al-Shibli, they reported him to the United Nations as part of its most-wanted list and issued an Interpol red notice seeking his arrest. The FBI and the Justice Department, Wolf, are not commenting on our report.

BLITZER: Let's see what happens next. And at some point, I'm sure they will be commenting. Susan, thanks very much.

Lots more news coming up here in THE SITUATION ROOM, including in Detroit. It is deeply, deeply in debt, billions actually in the red. Now Michigan's governor taking direct action. I will speak live with the governor, Rick Snyder.

And Pope Francis in his first full day on the job, he celebrates his first mass.

(COMMERCIAL BREAK)

BLITZER: Detroit is billions and billions of dollars in debt. Michigan's governor is not waiting any longer for a plan from the city's government.

In a very dramatic move today, he named the Washington attorney Kevyn Orr as his pick to take over the city as the emergency manager.

Republican Governor Rick Snyder is joining us, along with Kevyn Orr.

Gentlemen, thanks very much for joining us.

GOV. RICK SNYDER (R), MICHIGAN: It's great to be with you, Wolf.

KEVYN ORR, DETROIT EMERGENCY FINANCIAL MANAGER: Thank you, Wolf, for inviting us.

BLITZER: Well, Mr. Orr, let me start with you.

What are you going to do? I think you have about 18 months now to try to get Detroit's finances in order.

ORR: Wolf, the first thing I want to do is make an assessment if I can of enhancing city services to the citizens of Detroit. You know, some of the efforts have been made and there are some things in the pipeline we want to focus on those, and then I'm going to sit down with the consultants and with the restructuring team that the governor has in place to try to prioritize what we need to do next based upon the data.

BLITZER: Are you in effect, Mr. Orr, the mayor of Detroit right now? Because they have a mayor, Dave Bing, who was on the show about a month or so ago. Are you now in effect his boss?

ORR: No. The mayor is elected and I am appointed as a creature of state statute. I do have certain powers under state law that allow me to transcend some of the duties that are typically held by a chief executive. But the mayor is still the mayor. I think of myself as exactly what the statute says I am, an emergency financial manager.

SNYDER: And, Wolf, if I'd emphasize, it was great that the mayor was a participant today in the news conference.

ORR: Yes.

SNYDER: We wanted him to be a strong partner in this effort and it was great to have Mayor Bing with us today.

BLITZER: How likely is it, Governor, and I'll let Mr. Orr respond -- how likely is it that this could be a huge bankruptcy in the works right now for Detroit unless you guys come up with a specific plan that's going to be very bitter for a lot of folks there, Governor?

SNYDER: Again, the goal isn't to go into bankruptcy. The goal is to solve the problem. And that's the focus that Kevyn is going to have and that's one reason I was excited to get Kevyn onboard. He is one of the best restructuring bankruptcy people in the country and to make people know this is serious.

But, again, the goal is to work together as a team, go to creditors, work through this in a constructive, positive process, as opposed to just running to bankruptcy.

(CROSSTALK)

BLITZER: Do you expect to throw out or remove some of the long standing contracts with public employees unions and others in order to get the job done?

ORR: I don't necessarily expect to remove or throw them out. I think we're going to take a very deliberative and rational view of those contracts and see what if anything needs to be done to make them reflect the realities and externalities that are on the ground today. I mean, the maintenance of the status quo ante is not an option. We are looking at what we need to do to go forward and create a sustainable future for one of the greatest cities in the history of the country.

So, I'm not doctrinaire. I'm not particularly focused on one particular group. What I hope to be is reasoned and deliberative.

BLITZER: You walked Chrysler through its bankruptcy problems, what, back in 2009. Chrysler has now come back. General Motors similarly gone through bankruptcy coming back.

How would you compare what you're about to do with Detroit to what you did with Chrysler?

ORR: You know, I and my colleagues at Jones Day and the other financial professionals involved were very fortunate to have had the opportunity to take Chrysler through its bankruptcy and your direct question was, how does it compare?

I mean, Chrysler was a situation where we had financing and we were trying to restructure a private business under Chapter 11 of the bankruptcy code. So, they could go forward and make profit and Chrysler is doing that. They're making great profits, having year over year increase in sales. Sergio Marchionne, the chairman of the company, has done a tremendous job bringing that company forward.

The municipal issue is a little different. In addition to benefits to retirees and employees and also debt service, you've got to provide services to the citizens, the customers of the municipality, citizens of the city. So it's a different environment, different priorities, while similar in terms of what needs to be done from the mathematical aspects of a restructuring is a little different in terms of the services you need to provide the citizens.

BLITZER: One final question, Governor. One of Detroit's big problems is its population has decreased by more than half over the past 20 years or so, maybe even two-thirds. What do you do to bring people back to Detroit?

SNYDER: Well, Wolf, one of the good things going on that doesn't get recognized because people dwell on the negative so much is a lot of good things are going on in Detroit. People are moving into the center of the city -- midtown, downtown 95 percent occupancy. Young people want to move to Detroit. A lot of this is resolving the city services question with public safety, with lighting.

And as we resolve these, I think there's a great environment to say Detroit is the value place to be. It's an exciting place to be for young people and there's a lot of up side. So, by resolving city issues, we're going to create a platform because the solution to Detroit in the long term is let's grow Detroit, and a growing Detroit will continue to help the comeback of Michigan.

We're the comeback state. Let's get Detroit onboard and let's go.

BLITZER: If you can get the financial situation stabilized, people will come back to Detroit, but there is a lot to offer in that city.

ORR: Yes.

BLITZER: All right, guys. Thanks very much for coming in.

ORR: Thank you very much, Wolf.

SNYDER: Thank you.

BLITZER: More than 2,000 undocumented immigrants released from custody. Up next, why officials say it had to happen.

(COMMERCIAL BREAK)

BLITZER: After initially saying a few hundred illegal immigrants were released now, a federal official is saying it's a lot, lot more.

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

So what's the number? What's the latest?

LISA SYLVESTER, CNN CORRESPONDENT: OK, Wolf. So, the director of Immigrations and Customs Enforcement, he now tells a House committee today that more than 2,000 illegal immigrants have been released from detention facilities. John Morton says it was because his budget was sliced by $300 million in the recent forced spending cuts and he says the agency chose to release individuals who do to the pose a, quote, "significant threat to public safety" as opposed to furloughing officers.

And China officially has a new leader. The country's parliament voted Xi Jinping president. His real power, though, comes from being named general secretary of the communist party and chairman of the central military commission back in December. He is the son of one of the men behind Chinese communist revolution and he pledges to crack down on corruption. Today President Obama called to congratulate him.

And in what could be a major change in the Syrian civil war, France's foreign minister says the European Union must lift an embargo and start arming the rebels. British Prime Minister David Cameron is also saying his country could break from the embargo that is set to expire in May. According to opposition activists, 22 people were killed across Syria today.

And take a look here. This is a video that is trending online after singer Billy Joel made a college student's dream come true.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My favorite song is "A New York state of mind" and I was wondering if I could play with you. I would accompany you, that is.

BILLY JOEL, SINGER: OK.

(singing): Some folks like to get away take a holiday from the neighborhood --

(END VIDEO CLIP)

SYLVESTER: How cool is that?

The student says this was probably the greatest moment of his life so far. And, you know, Wolf? This just goes to show you, ask and you shall receive. Yes. And you know what? He got his wish. I think that's just fantastic, Wolf.

BLITZER: Billy Joel is amazing. I remember a couple years ago, they performed in Washington Nationals Park here. Billy Joel and Elton John together. It was quite, quite a concert. Thousands of people were there including me. I thoroughly enjoyed them. Can we hear a little more of Billy Joel? I guess we can.

SYLVESTER: Yes, roll the tape.

BLITZER: Can we get a little more?

SYLVESTER: I think they're going to rerack it just for you, Wolf, because you asked.

BLITZER: All right. We're waiting.

SYLVESTER: There we go.

(BEGIN VIDEO CLIP)

BILLY JOEL: OK.

(singing): Some folks like to get away take a holiday from the neighborhood, hop a flight to Miami Beach or to Hollywood, but I'm taking the Greyhound on the Hudson River Line --

(END VIDEO CLIP)

BLITZER: I will leave you there with Billy Joel. We'll take a quick break. Much more news right after this.

(COMMERCIAL BREAK)

BLITZER: Pope Francis today got down to work by leading prayers, offering words of wisdom. He's already carving out an image of a humble man who was devoted to his pastoral duties.

CNN's senior international correspondent Jim Bittermann is joining us now from Rome. Jim, tell us how Pope Francis spent his first full day as the new pope.

JIM BITTERMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it was a bit of cleaning up of loose ends from the conclave, Wolf. The fact is he went by his hotel and checked out. He came as a cardinal after all. He will stay here as a pope.

He went by and paid his hotel bill and got his bags and checked out and then went to sort of the symbolic end of the conclave, went to mass with the cardinals who elected him and at the mass spoke briefly about what his plans are and said the church has to move forward and it has to be built on a firm foundation.

Now, it's not clear exactly what he meant by that but there are probably a lot of people in this town who would like it to mean that would foundation would include firmly and finally dealing with the various scandals that have afflicted the church over the last few years.

Then attacking the problem that he also indicated he wanted to, he is a Jesuit after all, and that is the evangelization of the church. The Jesuits are known for evangelizing basically to get more people back into church and more priests into the priesthood especially in Western Europe where they've been on decline -- Wolf.

BLITZER: He has a major challenge ahead of him. We wish him obviously only the best. Jim Bittermann in Rome for us, thank you.

As you might suspect the pope graces the cover of the new issue of "Time" magazine. Let's discuss that new issue with Rick Stengel. He is the managing editor of our corporate sibling. It's an excellent article. I read the cover story. Rick, what are the biggest challenges Pope Francis will now face?

RICK STENGEL, MANAGING EDITOR, "TIME": Wolf, one of the interesting things about Francis is that he is both an insider and an outsider. He is the first new world pope, the first pope from Latin America. However, he is an Italian by heritage so he has a foot in both camps.

He understands Latin America, but he also understands the curio where the power of the Vatican lies. So his challenge is reconciling outside and inside, repairing some of the breaches within the church. It's dealing with the sex abuse scandal which is more in the west.

But one of the issues actually that hasn't come up is that he is from Latin America where about 40 percent of the world's Catholics are, but actually the growth of the church in Latin America has started to decline, and evangelical Christianity is making inroads with the church in Latin America. That will be one of his challenges, too.

BLITZER: Tell us about the election of the pope and why it captures so much of the imagination of the entire world that not just Catholics obviously, but so many people were interested, were watching, and their hopes are not high, that perhaps Pope Francis can really do something.

STENGEL: Well, when you think about it, Wolf, the Catholic Church as an institution has been around longer than any secular power that is on the planet. I mean, it's been hundreds and thousands of years and not to mention the pomp and ceremony. So I think people see it as a ritual that is all about continuation and about certain values that have existed for a long time and that are under threat today.

BLITZER: It's the new issue of "Time" magazine. Let's show the cover one more time. There it is, new world pope, the celebration of Pope Francis who just became the new pope yesterday. Rick Stengel as usual thanks for coming in.

STENGEL: Thank you, Wolf. Good to be here.

BLITZER: Thank you. Up next, grief and fury on the streets of Brooklyn after police kill a 16-year-old. We're taking a close look at the controversy.

(COMMERCIAL BREAK)

BLITZER: Sadness is mixing with anger on the streets of Brooklyn right now. Days after a 16-year-old was shot and killed by New York police. Protesters filled the streets at a chaotic and confrontational scene with officers. It was supposed to be a peaceful vigil, but it quickly turned.

Mary Snow is in Brooklyn for us. She is joining us now live. What is the mood there, Mary? What's going on?

MARY SNOW, CNN CORRESPONDENT: You know, Wolf, it is tense. Community leaders are now accusing outsiders of coming in and making things worse. Many here in this community are questioning the police account of what happened here on Saturday night.

It's tapping into a simmering anger among many here about the way they say they're treated by police.

(BEGIN VIDEOTAPE)

SNOW (voice-over): By day, a calm scene at this makeshift memorial, marking the spot where 16-year-old Kamani Gray was shot and killed by police Saturday night. By night, this scene turns violent.

Wednesday, protesters lashed out at police. The NYPD says 46 people were arrested and one officer was injured. It was the second night things turned ugly. On Monday, teens vandalized two local stores. Community leaders blame outsiders for inciting violence.

UNIDENTIFIED MALE: There are people well intentioned as they may be that are coming into the community and capitalizing on a terrible situation and making it worse.

SNOW: There are calls in this community for an independent investigation into Gray's death. The NYPD says the teen who they believe was a gang member pointed a gun at two plain clothes officers. They fired and he was killed.

The medical examiner determined he was shot seven times, including two shots to the back of his body. It's unclear the order of the shots. Police provided a photo of a gun they retrieved at the scene. Gray's father attended a news conference and spoke briefly.

UNIDENTIFIED MALE: What you want for this?

UNIDENTIFIED MALE: I just want the truth.

SNOW: Many in this community of West Indian immigrants are distrustful of police and leaders say they feel ignored and one religious leader says the shooting taps into anger of young kids who feel police are too aggressive.

UNIDENTIFIED MALE: I appreciate the job the police are doing. But, you know, take care of us and I'm saying to the community. Take care of the police.

UNIDENTIFIED MALE: As a parent, I can tell you the thought of losing a child is every parent's worst nightmare, and so our hearts all have to go out to the family of this young man. So far all indications are that the young man had a gun and I can promise you we will conduct a full and fair investigation.

(END VIDEOTAPE)

SNOW: Wolf, to try and ease some of the tensions here, some leaders in this neighborhood are asking both members of the community and the police to stop commenting on this investigation until they know exactly what happened here Saturday night -- Wolf.

BLITZER: Really tense situation right now in Brooklyn. Mary is all over the story for us. Thank you, Mary.

It is a case that is garnering national attention and putting a small Ohio town in a very negative spotlight. It started with a night of partying last summer and the alleged sexual assault of an intoxicated teenage girl.

Then pictures like this one, videos popped up on social media. Today is the day two of the trial for two high school football players and testimony focused in on cellphone records.

More witnesses are expected this afternoon and through the evening. Defense attorneys argue that tweets and posts on social media are making witnesses change their views on what happened that night. We'll continue to follow it this story for you as well.

Up next, power failures and toilet failures, a dream voyage turns into a nightmare for some as another cruise ship runs into serious trouble.

(COMMERCIAL BREAK)

BLITZER: Another Carnival cruise ship in trouble. What are they doing about it? Our own Brian Todd, he is now in Miami. He is over at Carnival's headquarters. He is digging for answers. Brian's report is next.

(COMMERCIAL BREAK)

BLITZER: Just a month after the epic failure of Carnival's Triumph cruise ship, another voyage to paradise turns into a travel nightmare. This time it's the "Dream," a Carnival liner is stuck in port at the Caribbean Island of St. Maarten.

Passengers are telling of power failures and once again toilet failures. Carnival is working to fly all of them back to Florida. Brian Todd is over at company headquarters in Miami with more. What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, some conflicting accounts between what's being told to us by passengers and what is being told to us by Carnival, on a couple specific things regarding passengers' discomfort on that vessel.

What we can tell you is that since some of their initial complaints they were not let off the ship while these maintenance issues were being addressed. They have since been allowed to disembark the Carnival Dream at St. Maarten. The ship had stopped there on a routine scheduled stop. That is when they had a maintenance issue. An emergency generator malfunctioned. They thought that they could fix it quickly so they kept passengers on the ship into the evening last night and into the overnight hours.

They soon figured out that they could not fix it quickly, but in the meantime passengers were kept onboard and there are varying accounts of what happened. Several passengers said toilets were overflowing throughout the vessel.

Of course, this harkens back to the Carnival Triumph incident last month where there was sewage flowing all over the ship. We were getting similar accounts from passengers on this vessel.

Now, Carnival says that only one public restroom experienced a periodic outage while they were maintaining it and getting it back online for a short period and only one cabin bathroom they had a request to clean only one cabin bathroom.

That is a little different from what we're hearing from other passengers, from passengers that say these toilet outages were a little more widespread. Also, Carnival says that all the toilets were functioning by 12:30 a.m. Eastern Time just after midnight.

But passenger, Kris Anderson, who also happens to be an anchor at WREG TV in Memphis, a CNN affiliate, he was on that vessel. Here is what he said about the timetable for when the toilets got back up.

(BEGIN VIDEO CLIP)

KRIS ANDERSON, WREG ANCHOR (via telephone): The toilets were off for quite some time. And I think the problem that people might be having with the toilets backing up is it is a similar situation at home if your toilet gets clogged, you flush it repeatedly, the water will keep coming up and coming up.

Whereas if you just flush it once, see it's not working, close the lid and forget about it you're not going to be in trouble. But they were out of service for quite some time, for several hours. Ours started working about 8:00 this morning.

(END VIDEO CLIP)

TODD: So he says they were working at 8:00 this morning. Carnival says the toilets were working several hours before that. I ran his account by a Carnival official and that official said they'd look into those reports. They are trying to, of course, address these maintenance issues.

In the meantime, Carnival Dream passengers are still most of them still in St. Maarten. Carnival is arranging charter flights for them to fly them to Orlando. Those flights -- there is no timetable on when they're going to get out of there probably overnight tonight into tomorrow morning, Wolf.

So again, a big inconvenience for Carnival passengers, this ship was near the end of its -- about a week-long voyage into the Caribbean so most of the trip was done anyway. But still, a real inconvenience for those passengers.

BLITZER: What are they offering Carnival? What are they offering the passengers as compensation?

TODD: Well, we got a copy of a letter by a passenger who didn't want to be named. This was a letter from the captain to the passengers. In that letter, he said that they would offer them a three-day discount on their fare plus an offer to return on another carnival cruise ship of two to seven-day duration for 50 percent off.

That is the offer they're getting initially. Now as you'll recall, passengers aboard the Carnival Triumph last month were offered packages like discounts and free cruises, but some of them elected not to take that deal and some of them are of course engaged in a class action lawsuit against Carnival.

BLITZER: Let's see what happens on this front. I know you're going to have more later. Brian, thanks very, very much.

Meanwhile passengers, pilots, and flight attendants are all lining up against them. Now Congress is asking some really serious questions of the man who ordered knives to be allowed back on U.S. airliners is defending his decision.

Let's bring in our crime and justice correspondent Joe Johns. Joe, these are small knives that he is suggesting now be allowed, but it has caused a huge, huge amount of criticism.

JOE JOHNS, CRIME AND JUSTICE CORRESPONDENT: It certainly has, Wolf. The head of the Transportation Security Administration John Pistole was sticking to his message today on Capitol Hill. He has taken harsh criticism for his decision on March 5th allowing small knives on planes while the limit on liquids you can carry on a plane remains in effect.

Pistole was on the Hill restating his position. We already know that bombs are a bigger threat than small knives.

(BEGIN VIDEO CLIP)

JOHN PISTOLE, TSA ADMINISTRATOR: The small pocket knife is simply not going to result in the catastrophic failure of an aircraft. An improvised explosive device will. We know from internal testing searching for these items which will not blow up an aircraft can distract our security officers from focusing on the components of an IED.

(END VIDEO CLIP)

JOHNS: To underscore the idea, Pistole essentially saying his people needs to refocus on the threats that could blow up a plane. He even played an old FBI video that we have seen before of the detonation of a chemical explosive called PETN, which underscores what TSA says the real dangers are, but Pistole hasn't been able to tamp down the uproar.

Democratic Congressman Sheila Jackson Lee wants TSA to rethink this.

(BEGIN VIDEO CLIP)

REPRESENTATIVE SHEILA JACKSON LEE (D), TEXAS: You need to stop this now. These cause bleeding. These cause injuries. These can cause a terrible tragedy and I don't want to take it to the next length. It can possibly cause someone to lose their life.

PISTOLE: The fact is there are so many objects already on flights that can cause the type of harm you're talking about.

(END VIDEO CLIP)

JOHNS: Three airlines, the Flight Attendants' Association and a bunch of members of Congress do not think the rule is necessarily a good idea. Pistole defended it saying the new rule makes sense focusing on where the threat is.

The catastrophe of 9/11 now more than a decade ago still fresh in the public's memory, Wolf, and so is the threat of men using sharp objects to overpower the passengers and crew of planes.

BLITZER: I know the debate is only just beginning and there will be a lot more. Joe, thanks very much for that report.

Meanwhile, a testy exchange between two U.S. senators leads one to say, and I'm quoting now, "I'm not a sixth grader." In our next hour what led the veteran Senator Dianne Feinstein to give a freshman colleague, Ted Cruz, such a stern rebuke.

(COMMERCIAL BREAK)

BLITZER: On the final day of President Obama's charm offensive as it's called up on Capitol Hill, he met with Senate Republicans and House Democrats today while the major issue was the looming budget showdown. It's not the only issue the White House and lawmakers are disagreeing on.

Earlier, my colleague, Kate Bolduan and I spoke with the House Majority Leader Eric Cantor.

(BEGIN VIDEOTAPE)

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Mr. Leader, I want to ask you about the skills act. For those who don't know the act itself, it essentially works to revamp the federal jobs training program.

Now the administration just yesterday put out a statement about the act saying it makes some positive steps, but also says this in part, it says the bill would eliminate or allow the consolidation of many targeted programs without providing the critical assistance needed by vulnerable populations. Such as veterans, low income adults, youth, adults with literacy and English language needs, people with disabilities, ex-offenders, and others with significant barriers to employment.

So with such huge issues before the Congress as we've been talking about in this conversation if you can't agree on revamping the federal jobs program, what can you agree on with the White House?

REPRESENTATIVE ERIC CANTOR (R), MAJORITY LEADER: Listen. This is why we hope that that is just an initial statement by the White House. This is a General Accounting Office recommendation. We've got 50 worker-training programs at the federal level, 50.

What this bill does is it tries to take 35 of them, de-conflict them, and make it so that there is a one stop shop for everybody who is unemployed, seeking a new job but they need skills in order to get there. We protect the veteran population.

We specifically spell out the vulnerable populations that you just mentioned to make sure that the state worker training boards address the needs of those. But what's happened thus far is it's been a micro management situation in Washington with 50 different programs where you have the unemployed having a lot of difficulty understanding how to navigate that maze.

The vision here is to set up a one-stop shop in all the regions in each state around the country, allow unemployed workers to come in and say, I'm desirous of going back to work. The state knows in its area of the country where the available jobs are and believe me, I was told today in Northern Virginia alone there are 600,000 unfilled positions by the year 2020.

That means skilled work force is an issue. We want to make sure the unemployed workers have these skills to get the jobs. The skills act is the way to do it.

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BLITZER: You can see our full interview with the House Majority Leader Eric Cantor. That comes up 6:00 p.m. Eastern right here in THE SITUATION ROOM. We go through all of the major issues facing Congress and the White House right now.